April 14 (Bloomberg) -- U.K. Liberal Democrat leader Charles Kennedy today will pledge to cut local levies and university fees while improving health care, paying for the measures with higher taxes on the country's biggest earners.

``In order to end tuition fees, provide free personal care for the elderly and reduce local taxes, the 1 percent of people earning over 100,000 pounds ($189,000) a year will pay a new top rate of tax of 50 percent,'' Kennedy will say in a speech in London, according to a statement received from the party.

Kennedy's party, aiming to overtake the Conservative party as the main opposition, is alone in making higher taxes part of the campaign to win voter support ahead of the May 5 election. Prime Minister Tony Blair's Labour government has promised to make no change to income tax rates while the Conservatives say they'll reduce taxes by 4 billion pounds.

Liberal Democrats, who control 8.5 percent of the seats in Parliament, have cut into Blair's support by opposing the war in Iraq and promising more improvements to the National Health Service than Labour is planning to deliver. Kennedy's speech will begin at 7:30 a.m. London time today.

A poll by NOP Ltd. put support for the Liberal Democrats at 21 percent compared with 18 percent at the time of the last election in 2001. Labour's backing fell to 38 percent from 41 percent over the same period. The Conservatives had support from 32 percent of voters. The survey of 956 adults between April 8 and April 10 had a margin of error of 3 percentage points.

``Labour remain ahead in opinion polls, but less than in the 2001 election,'' Michael Saunders, chief Western European economist at Citigroup Inc., wrote in a note to clients.

Tax Rates

Currently, the basic rate of income tax is 22 percent, though workers pay 40 percent on earnings above 32,400 pounds ($61,400). Labour cut the basic income tax rate from 23 percent in April 2000 and hasn't made a change since then.

Income tax rates have drifted lower since Margaret Thatcher took office in 1979. Her Conservative government reduced the top tax rate on earned income from 83 percent to 60 percent and on investment earnings to 75 percent from 98 percent.

Yesterday, Blair pledged to keep both the top rate of tax and the basic rate unchanged. His pledges didn't extend to National Insurance contributions that pay for health care. Labour raised those levies after the 2001 election.

Conservative Leader Michael Howard has promised a total of 4 billion pounds of tax reductions, without yet spelling out exactly who will benefit. He's planning an announcement on the matter in the coming days.

Manifesto Pledges

Kennedy today will promise free eye and dental checks on the NHS if the Liberal Democrats win power. He'd also improve care for the elderly, prompting the NHS to pay for help with washing and feeding those who need long-term care.

In schools, the Liberal Democrats plan to cut class sizes and to end student fees in universities introduced by Blair's government. He would also add 10,000 police officers and end the council tax, a local levy based on the value of homes. Instead of that, the Liberal Democrats would have a local income tax.

``We have no hidden taxes,'' Kennedy will say, according to a text of his remarks. ``Ninety-nine percent of people will not pay more under this tax proposal, but the benefits will be for 100 percent of people.''

He will reiterate his opposition to the war in Iraq, which Labour and the Conservatives backed when it began in March 2003.

``Many people will remember the principled and consistent Liberal Democrat opposition to the war in Iraq,'' Kennedy will say. ``Many people will remember that the Conservatives lined up with Tony Blair. The Liberal Democrats have been the real opposition.''

To contact the reporter on this story: Reed Landberg in London landberg@bloomberg.net.

Last Updated: April 13, 2005 19:02 EDT