Lib Dems urged: do not drop 1p tax

Liberal Democrat education spokesman Phil Willis has warned his party against dropping its penny-on-tax policy if it means reneging on further and higher education promises.

Mr Willis spoke out after the Liberal Democrats' Treasury spokesman Matthew Taylor indicated that the party might drop its long-standing tax policy from its next general election manifesto. The extra penny in the pound is earmarked for education.

Mr Taylor, who has presented an alternative budget ahead of the real thing next Wednesday, suggested the policy could be dropped if the government comes up with sufficient money for things such as the abolition of undergraduate tuition fees.

Mr Willis said that although he agreed with Mr Taylor's premise, the party could not abandon its policies on tuition fees, restoring student maintenance grants or extending income-contingent loans to all further education students.

He said: "I have made it clear to the (Liberal Democrat) shadow cabinet and to Matthew that there will be no question of lifting the policy of a penny on income tax unless we meet our commitments to education. There is a bottom line in education that we do not renege on (manifesto) promises. Until these problems (in education) are resolved, the penny on tax should remain."

Mr Willis said that the government would have to invest about £750 million to scrap tuition fees and introduce grants. He said that if the government came up with sufficient money to cover this and shortfalls in school and college spending, then the party should consider dropping its tax policy.

Mr Willis said that it would be clear from the comprehensive spending review later this year whether the money would be there. The spending review will set out government spending in all departments from 2003 to 2006.