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Clegg issues new tax levy appeal

Deputy Prime Minister Nick Clegg is urging his Tory coalition partners to impose a levy on Britain's "super wealthy" to fund a £1 billion tax giveaway for ordinary families.

The Liberal Democrat leader said he wanted Chancellor George Osborne to take advantage of the improving economy to raise the threshold at which people start paying income tax to at least £10,500 before the next general election in May 2015.

At the same time, he criticised the Conservatives for their "ideological" commitment to a permanently smaller state, insisting there had to be a balance between reducing the debt burden and providing decent public services.

Mr Clegg said his plan to raise the personal allowance would be worth £100 a year to 24 million ordinary rate taxpayers while taking about half a million people out of income tax altogether.

"As the recovery is finally taking hold I think it is very important that as many people as possible feel that they are benefiting from it. That's why I call it a workers' bonus," he told BBC1's The Andrew Marr Show.

However, he acknowledged that the Conservatives were currently not signed up to the proposal.

"Of course, I need to persuade my Conservative coalition partners. In the past the Conservatives have tended to have a different set of tax priorities - first inheritance tax cuts for very rich people, then a tax cut in the upper rate of income tax and now of course the married tax break," he said.

While the Lib Dems have seen the coalition achieve their manifesto commitment to raise the personal allowance to £10,000 - which was finally reached in the last Budget in March - Mr Clegg said he had had to fight the Tories all the way.

"I have had to argue very strongly for each step in the increase in the allowance. The Conservatives before the election felt this was not an affordable policy. I've insisted all along that it is affordable," he said.

He said he believed that a further increase in the personal allowance could be funded by a levy - such as a "mansion tax" on the very wealthiest, but the Conservatives were opposed to the idea.

"If I was prime minister and there was a Liberal Democrat government I would ask people at the very top - perhaps through a small levy in the mansion tax - to raise much or all of that money," he said.

"I believe - but the Conservatives don't agree with this - we can ask the super wealthy to pay a little bit extra. Not to go after them in a recriminatory way but to ask them to make an extra contribution. Obviously in a coalition where the Conservatives have said they don't want to ask the very wealthy, we'll find another way."

In a further move to distance himself from the Tories, Mr Clegg rejected David Cameron's call in his Guildhall speech last week for a "permanently" smaller state sector.

"You appear to have this view from the right now that taxes should never go up and that in a sense you should be shrinking the state to ever smaller size in a slightly ideological way. I don't think we should be ideological about this," he said.

"We can strike the balance in the years to come, whoever's in power in the next parliament and beyond, in bringing down the debt burden as a proportion of the country's wealth ... but also funding decent public services in a way which millions of people depend upon."

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