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Clegg warns Tories on 50p tax rate

Deputy Prime Minister Nick Clegg warned his Tory coalition partners that he could block any move to attempt to scrap the 50p top rate of tax.

On the eve of the Liberal Democrats' annual party conference in Birmingham, he said cutting rates for the wealthy while millions were struggling to make ends meet could "destroy" public support for the entire tax system.

In an interview with The Independent, Mr Clegg also acknowledged that the Government had to do more to boost growth in the economy, adopting what he called a "Plan A-plus".

Chancellor George Osborne has made no secret of his desire to abolish the 50p rate on incomes over £150,000 - describing it as a "temporary" measure introduced by the former Labour government.

However, Mr Clegg made clear that as far as the Lib Dems were concerned, the priority had to be reducing the burden of taxation on lower and middle income earners. "We are not there to rush to the aid of the top 1% of very, very rich people who are not in straitened circumstances," he said.

"If millions of taxpayers feel they are being overlooked, ignored and passed over, as preference is given to people who need the least amount of help at the moment, you destroy the very fabric of consensus without which a sensible tax system cannot survive.

"It would be utterly incomprehensible for millions of people who work hard, do their best for their families, and play by the rules, if suddenly the priority is to give 300,000 people at the very, very top a tax break. It is not going to happen - certainly not until there is significant progress on giving tax breaks to those on lower and middle incomes."

While his show of muscle-flexing on the eve of the party conference season will doubtless play well with Lib Dem activists, it will infuriate many Tories who are determined to see an end to the 50p rate.

However, Mr Clegg made clear the Lib Dems would back abolition in the long run only if it was not raising much revenue and if it was replaced by new taxes on "unearned income". These could include a 1% annual "mansion tax" on homes worth more than £2m, a land tax, and restricting tax relief on pensions to the basic 20p rate.

Mr Clegg also risked further antagonising by Mr Osborne - who has always insisted there was no "Plan B" alternative to his deficit reduction plan - by conceding the Government had adopted a "Plan A-plus" to ensure growth. He said: "For too long people have assumed that, because we are sticking to the fiscal plan, somehow the Government is impotent. It is complete nonsense."


From Belfast Telegraph