How we will make the tax system fairer

Vince Cable and I are currently briefing the press about what we want to see in Wednesday's Budget. I thought you would like to know what we are saying.

It is clear that this recession demands a radical overhaul of the British tax system. It remains scandalous that the richest in our country pay a lower share of their wealth in tax than the poorest. We are demanding that both sides of this distorted equation be changed.

We are renewing our call to close the loopholes exploited by big business and the powerful and wealthy. And today, after working with our colleagues in Parliament and across the Party, we are announcing that the Liberal Democrats will fight the next general election with a pledge to cut income tax bills by £700 for people on low and middle incomes.

We will promise to raise the income tax personal allowance to £10,000 by closing tax loopholes exploited by big businesses and the wealthy. This will mean 4 million of the lowest paid people not paying tax at all, including many earning just the minimum wage.

It is a radical and progressive package that will form a key part of the pre-manifesto document that will come to our party conference in Autumn. This policy marks us out as the only party in British politics dedicated to changing our tax system to make it fairer.