Charles Kennedy: "Boost for health"

The Liberal Democrats are also pledging there will be no new "stealth taxes" if they were to win the forthcoming general election.

They are promising an annual citizen's tax contract, to be sent to every taxpayer each year, spelling out exactly what taxes people are paying, what the money is being spent on and any tax changes since the last contract.

'Stealth taxes'

Treasury spokesman Matthew Taylor said the contract had made Lib Dems the first party to forego the option of "stealth taxes", which he said boosted the total tax-take but went largely unnoticed by voters because they did not affect income tax.

The Lib Dems are committed to raising top-rate income tax on earnings above �100,000 by 10p to 50p in the pound, and have said, if the economic climate makes it necessary, they would raise the basic rate by 1p to pay for education investment.

They are also proposing, if resources allow, to scrap the 10p lower rate, taking 1.5 million low-paid workers out of income tax altogether.

'Wish list'

But the Lib Dem proposals were attacked by shadow chancellor Michael Portillo as an "uncosted wish list".

"When it comes to paying for all their services, the tax rises they admit to would be just the tip of the iceberg," he said

"The Lib Dems are out of touch with hard-working families, savers and pensioners who are paying too much tax.

"Where Labour raises taxes by stealth, the Lib Dems raise them by design.

"It is clearer than ever that a vote for the Lib Dems is a vote for higher taxes."