Liberal Democrats want to make the tax and benefits system fair, so that everyone, be they young or old, can afford to get by. We have plans for the most radical, far-reaching tax reforms in a generation.

These changes are desperately needed. Conservative and Labour governments have changed Britain into one of the most unequal societies in the developed world, where ordinary people struggle to make ends meet while the richest benefit from tax breaks. The poorest fifth of the population pay a higher proportion of their income in tax than the richest fifth.

tax fairness for everyone

Under a Liberal Democrat Government, you will not have to pay any income tax on the first £10,000 you earn. This will free half a million people in Scotland on low incomes from having to pay any income tax at all and put £700 back in the pockets of millions more people on low and middle incomes.

In this way we will help people struggling to make ends meet and provide an incentive to work and save.

dealing with the deficit

The health of the economy depends on the health of the country’s finances. Public borrowing has reached unsustainable levels and needs to be brought under control to protect the country’s economic future.

A Liberal Democrat Government will be straight with people about the tough choices ahead. Not only must waste be eliminated, but we must also be bold about finding big areas of spending that can be cut completely. That way we can control borrowing, protect the services people rely on most and still find some money to invest in building a fair future for everyone.

We have already identified over £15 billion of savings in government spending per year, vastly in excess of the £5 billion per year we have set aside for additional spending commitments. All our spending commitments will be funded from this pool of identified savings, with all remaining savings used to reduce the deficit.

fairness in pensions, savings and benefits

Labour has created a hugely complex and unfair benefits system, and it needs to be reformed. Pensions and savings have been undermined.

Restoring the link between the basic state pension and earnings immediately. We will uprate the state pension annually by whichever is the higher of growth in earnings, growth in prices or 2.5 per cent.

Increasing the income tax threshold to £10,000.