New Forest East

ODPM – LOCAL INCOME TAX – 19 October 2005

Dr Julian Lewis: The hon. Lady has almost answered my question already. In the run-up to the General Election, her party's Treasury Spokesman [Vince Cable] admitted that under Local Income Tax, households with two or more wage-earners would pay more. In my constituency a household with two wage-earners would pay £721 more, which was one of the reasons why my majority massively increased over the Liberal Democrats. Can she confirm that she will remain consistent and support Local Income Tax for the indefinite future? We should love her to do so.

[Sarah Teather: I happily confirm that we shall be supporting Local Income Tax for the indefinite future. Just to clarify, it was never said that two-earner households would do worse. Some will. Those who earn considerably more than the average will do worse, and we have never hidden that. This is a progressive taxation system. Some do better; some do worse. That is the point.]

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Dr Lewis: May I remind the hon. Gentleman that during the election campaign the Leader of his party [Charles Kennedy] was gravely embarrassed when he logged on to the Liberal Democrats' own website on air and made some comparisons using the website's calculator. In nearly every case with more than one wage earner in the household, the Local Income Tax would have cost people a great deal more. The hon. Gentleman cannot escape that fact, however much he tries to spin it.

[David Howarth: I repeat that the cost will depend on the band of house that people already occupy. People who live together in large houses are, by definition, in high band houses, so the comparison with the average house is not valid.]