Campbell appeals to party as crunch vote looms

LONDON, Sep 19 (Reuters) Liberal Democrat leader Menzies Campbell today appealed to his party to demonstrate they were a credible party of government, ahead of a crunch vote on tax policy.

Campbell faces the possibility of a damaging defeat by conference delegates over plans to ditch the party's 50 per cent top rate of income tax.

He said he would be disappointed if he lost the vote because he believed the proposals are the best way forward for the party.

''I'm absolutely convinced that the best way in which to lead on issues of this kind is to say exactly what you think,'' Campbell told BBC radio.

He said he was determined to move the party from one of opposition towards being a party of government.

''In order to do that, we have got to ensure our credibility, particularly in issues like taxation, is beyond reproach,'' he said.

Campbell's proposal to scrap the 50 per cent top rate of tax for high earners has already suffered a setback after party president Simon Hughes yesterday failed to back his campaign.

Hughes, who stood against Campbell for the leadership in March, said it was ''absolutely not the end of the world'' if party members voted down the proposals.

Party chiefs are concerned that a motion put forward by MP Evan Harris, the party's former health spokesman, to reinstate the 50 percent policy will be carried.

The tax reform vote is seen as a key test of Campbell's authority at his first party conference as leader. Adding to the pressure will be the presence of his predecessor.

Former leader Charles Kennedy, who stepped down earlier this year after saying he was battling an alcohol problem but who remains popular with rank and file members, will be addressing the conference later today.

Some observers say it would be a big blow to Campbell's leadership if he lost the vote because the tax proposals are the biggest change in policy he has attempted since becoming leader in March.

Campbell and his Treasury spokesman Vince Cable are proposing tax cuts of 18 billion pounds by axing the 10 per cent income tax rate and reducing the standard rate by two per cent.

REUTERS DKA RK1510