Treasury spokesman Vince Cable says that the radical policy shift would be fairer on low-income households.
The Liberal Democrats have radically shifted policy on tax, as they plan a manifesto pledge for the next election to cut 4-6p off the basic rate.
Treasury spokesman Vince Cable is behind the new policy, which repositions the Lib Dems as the party which advocates the deepest tax cuts. The big reduction, which is set to cost the public purse around £12 billion a year if implemented, was approved at the party's annual conference yesterday.
The party campaigned for many years on a promise to add 1p to the basic rate of income tax, in order to pay for better public services. Indeed, Mr Cable admitted yesterday that the move might not be popular with all party members.
Speaking to conference, he commented: "I keep reading in the press that some of our activists don't like the language of tax cutting: they think it is rightwing, but I don't see what is rightwing about wanting to cut the taxes of millions of people who earn less or barely more than the equivalent of the minimum wage."
He added: "It isn't possible to have a sense of society, let alone of patriotism, when hardworking families and pensioners pay through the nose while others don't pay their share and dodge taxes through tax havens or tax avoidance schemes."
The Lib Dems are also advocating cutting £20 billion from public spending, a pledge which they say would be made good in government through efficiency savings. The policy would also offset the dramatic loss of revenue which would follow from the income tax cut.
