FAIRER TAXES AND GOVERNMENT SAVINGS TO FUND PRIORITY PUBLIC SERVICES - LIB DEMS

Liberal Democrat proposals published today would scrap council tax, abolish student tuition fees and deliver millions of pounds extra for local services, says Totnes Liberal Democrat Parliamentary Spokesperson Speaking after the launch of the Liberal Democrat Alternative Budget 2004, Mike Treleaven said:

"Liberal Democrats believe in fair tax not high tax. That is why we would scrap the unfair council tax and replace it with a local income tax, based on people's ability to pay.

"Student tuition fees are an unfair tax too. They are a tax on learning. That is why we would stop top-up fees, scrap tuition fees and bring in fair grants for poorer students. We would also scrap the unfair charges that many older people have to pay when they need help with their personal care, such as washing and dressing. In Scotland, where the Liberal Democrats have been part of the government for the last five years, we have already done these things. I want to see them done here in England too. And today the Liberal Democrats have set out how we can, paid for by asking the highest earners to pay a small amount extra in tax."

Mike Treleaven has also welcomed today's announcement by Liberal Democrat Leader Charles Kennedy that the party have found at least £5 billion a year of savings which can be made and the money redirected into frontline public services:

"I want to see first class public services - but I believe they can be achieved through better spending, not just bigger spending. Too much is being spent on low priority areas with not enough making it through to the front line.

"By cutting down the size of government, moving some ministries outside expensive Central London and devolving more decision-making powers to local communities we can make big savings in the central government budget which can be used for priority public services like improving health care, pensions and fighting crime.

"The Liberal Democrats have identified more than £5 billion of savings that could be made from the government's spending every year. That works out at more than £7.5 million extra for every constituency in Britain. Some of that money would be spent centrally, on areas like pensions, but it would also deliver real improvements in services here in the Totnes Constituency- and without putting up people's tax bills."

Notes to editors

The Liberal Democrat Alternative Budget 2004, launched on Thursday March 4th by Lib Dem Leader Charles Kennedy and Shadow Chancellor Vincent Cable, includes plans for:

• Abolition of tuition and top-up fees, and reintroduction of grants for the poorest university students as in Scotland and Wales;

• Free personal care (this includes help with washing and dressing for all those who need it);

• Lower council taxes, with at least £1.7 billion extra to keep down council tax ahead of its replacement with a local income tax based on ability to pay.

These plans would be funded by taxing income over £100,000 a year at a new 50% rate.

Proposals for redirecting resources to the front line include:

• Scrapping of the DTI, drastically cut the budgets for industrial support and bailouts by up to £7.5bn over the life of a parliament

• Scrapping the Child Trust Fund, saving £1.25bn in a parliament.

• Cutting some extravagant and outdated commitments in the defence budget like much of the residual Eurofighter programme saving a minimum of £2bn.

• Up to £1.5bn saved by not introducing ID cards.

• Selling off city centre prison sites where the buildings are old and incapable of supporting constructive regimes for offenders, while commissioning new PFI prisons to replace them, saving up to £500m over a Parliament.

• A limited privatisation programme, including the Royal Mint, the Defence Export Services Organisation, British Trade International, the remaining Motorway Service Station assets, Queen Elizabeth II Centre, and the Export Credit Guarantees Department.

• Scrapping many of the wasteful, centrally driven, Area Based Initiatives in the Office of the Deputy Prime Minister and DEFRA.

Plans for a restructured Government to save money and devolve decision making to local people include:

• Cutting the number of ministries and ministers, scrapping four departments entirely, restructuring and merging others and cutting over 40 ministers.

• A cull of quangos to achieve significant decentralisation.

• Decentralisation by relocation of civil service departments, such as moving the Treasury to Liverpool, saving £2.5bn over the life of a parliament in office rents.

• Saving of £1.4 billion over a parliament in administration and benefits by scrapping council tax.

Priorities for the reinvestment of savings include:

1. Tackling inequalities in the early years of life: At the next General Election we intend to set out a clear programme to challenge inequality at its source.

2. Tackling crime and its causes: We need reform of our prisons, reform of rehabilitation services, and to reform and expand of our police forces.

3. Improving our health services: We would transform our health service into a system that not only treats bad health, but promotes good health as well.

4. Reform of pensions system: Pensions are the time-bomb issue of British politics.

5. Living up to Britain's international obligations on overseas aid: The aid budget is less than half the size of the target the UK has committed to at the UN.