Ashdown: windfall tax is unjust

Ashdown Attacks Windfall Tax

He accused the Chancellor, Gordon Brown, who will unveil details of the tax in his Budget next week, of "choosing a convenient political enemy" with the one-off tax.

The government plans to use the proceeds of the tax to fund an emergency programme designed to get 250,000 under-25s off benefit and into work. But Mr Ashdown claimed that it was a "fundamentally misguided manipulation" of the taxation system.

"I'm not here to defend the fat cats, but we have a taxation system which is progressive. To simply choose a convenient political enemy, lift the money from them and then the consumer has to pay in the end anyway, it's the wrong form of taxation and it will produce the wrong result," he told Radio 4's Today programme.

Mr Ashdown said that investment in education and getting people back to work were important aims. But the correct form of taxation to fund such investment was income tax and the Government had effectively ruled out an increase in that by its pre-election rhetoric.

"Because of the rhetoric of the election campaign, the one tax that's fairest, easiest to collect and most progressive, income tax, is the one we can't use," said Mr Ashdown.

"If we are going to invest in education and assist people back to work, then we should do that in an open and progressive manner," he added.