Charles Kennedy has suggested that the Liberal Democrats will drop their policy of imposing a 50p top rate of tax on earnings above £100,000 a year. In a speech setting out his strategy, the Liberal Democrat leader said: "We do not need and we should not seek a punitive taxation system. But we must not lose sight of those who aspire to achieve income levels which will bring them into the top-rate taxation band in time to come. So we should not fall into the trap of believing that through taxation and spending we can cure all ills."He tried to silence a whispering campaign against his leadership by saying that "positive unity" was "critical" for the party.

He gave a nod to critics who have urged him to be more bold by agreeing the party needed to take risks."There is no way forward if we opt for the easy life, heads kept securely safe below the parapet," he said. "If we're not prepared to live a little dangerously at times, then the far greater danger is that we just don't live at all."The party needed to "avoid complacency" and be "a dynamic, forward-looking and progressive force in politics". He added: "Twenty-first century Liberalism has to be about more than the politics of protests or the need for principled positions within politics. It has to be about presenting ourselves as credible contenders for power, not just for its own sake, but because of what we want to do with it as we gain more."Mr Kennedy said that his party needed "a better-developed account of ourselves and a prescriptive analysis of our country". He added: "We need a more holistic picture, which brings together better in people's minds how our various individual policies both relate to each other and add up overall." After criticism that the party did not have distinctive policies on public services, Mr Kennedy acknowledged there was a need to "develop credible, alternative proposals to the changes that Labour is making in the structure and delivery of our public services, particularly in health and education." It would face more tough choices on spending, he said.He asked the tax commission to make proposals to strip away complicated allowances and create a simpler, fairer structure of taxation with measures to tackle avoidance and evasion. Mr Kennedy has asked Mark Oaten, the home affairs spokesman, and Ed Davey, the education spokesman, for "innovative ideas" on how to stop young people becoming disaffected and showing no "respect". They will look at "the interface between school and society and those important years when children move into adulthood"..

Britain's immigration system has "not come close" to meeting Tony Blair's target for throwing failed asylum-seekers out of the country, public spending watchdogs have warned. In a highly critical report, the National Audit Office (NAO) said around 283,500 failed asylum-seekers may still be in the country. Auditors highlighted a string of problems at the Home Office Immigration and Nationality Directorate (IND). They warned that it would find it hard to hit Mr Blair's end of year target to reduce the number of failed asylum-seekers still resident in the country by deporting more each month than the number of new applications they reject.One senior NAO official said: "They are not there yet. In order to get there, relying just on being able to arrest and detain more people prior to removal is not going in itself to achieve the target". It is shocking that IND cannot give a solid estimate of how many failed applicants are still in the UK, but the NAO tells us it could have been as many as 283,000 in May 2004 - which means an even higher number today."Mark Oaten, the Liberal Democrats' home affairs spokesman, said: "The massive backlog of cases is clearly eating up resources which could be spent on improving a failing system."The Government must look at creative new solutions to encourage failed asylum-seekers to leave the UK, using carrots as well as sticks. The report makes a powerful case for giving individuals incentives to return, including free plane tickets and help with education and training."But Tony McNulty, the Immigration Minister, said: "We have significantly reduced asylum applications and have increased the proportion of failed asylum- seekers we return."While progress has been made, we know there is more to do - which is why measures to increase and speed up removals are at the heart of our five-year strategy on asylum and immigration, published in February.".