It's Official - The Poorest In Britain Pay More In Tax Than The Richest

11.48.00am BST (GMT +0100) Thu 6th May 2004

Commenting on tax fairness figures out today Dr Vince Cable MP, Liberal Democrat Shadow Chancellor, said: "It is simply not fair that the poorest people in Britain pay a higher proportion of their incomes in tax than the richest.

"A major reason that the system is so unfair is Council Tax - which is not related to ability to pay. The best way to make the system fairer is to scrap the unfair Council Tax and replace it with a fair local income tax based on ability to pay. "The Chancellor must either accept that the system is unfair and say what he plans to do to make it fairer, or admit that he has no solutions to help the millions of people who are being hit by this unfair tax."

Ends

Notes

1. Today's data show that the poorest 20% of households pay 4.6% of their incomes in council tax (and rates in Northern Ireland) compared to 1.6% for the richest 20%. Overall people in the poorest households are paying 37.9% of their income in tax compared to 35.1% for the richest 20%.

2. Today's data is from the article 'The effects of taxes and benefits on household income 2002-3' (ONS) which contains information on taxes paid by households.

3. This information takes account of what people actually pay in tax and receive in benefits - so is the most accurate data available of the fairness in practice of major taxes.