Fair Tax but not Higher Tax - Kennedy sets out new Liberal Democrat stance

4.30.00pm UTC (GMT +0000) Mon 21st Nov 2005

The Liberal Democrats are adopting a more flexible economic policy which matches Labour's total spending but ensures that it is collected in a fairer way. The Party is committed to fairness and social justice.

Key principles of Liberal Democrat economic policy:

• Fairer tax, not higher tax - our proposals will be 'tax neutral' but raised more fairly.

• Wealthy and polluters would pay more, so that poor and old can pay less.

• Does not affect 50p income tax rate policy or local income tax - still part of our thinking.

• Still believe in green taxes which encourage better environmental behaviour.

• We remain fundamentally opposed to student tuition fees and charges for personal care.

• Chris Huhne (Shadow Chief Secretary) is identifying £15 billion (3% of public expenditure) that we would spend differently - three times what we proposed at the May election - to allow us to fund our priorities.

• No absolute decisions on tax and spending levels until much closer to the next election.