Tax cuts aimed at poorest - Clegg

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Lib Dems say big tax cuts are needed

Nine out of ten people will benefit from Liberal Democrat proposals to cut taxes with the poorest gaining most, Nick Clegg has said.

Ahead of his first autumn party conference as leader, Mr Clegg told the Evening Standard that any future tax cuts should start "from the bottom up".

Tax is set to be the issue of fiercest debate in Bournemouth as the party seeks to shed its tax and spend tag.

Mr Clegg acknowledged the public was still "getting to know him" as leader.

Debate ahead

The Lib Dem leadership is seeking the support of its members at its conference, which begins this weekend, for plans to cut government expenditure by £20bn.

Mr Clegg wants to use a chunk of these savings to cut taxes for low and middle-income families.

As much of that money that we claw back from government, once we have met our spending priorities, should be given back in tax cuts Nick Clegg, Lib Dem leader

The party is already committed to a 4 pence cut in income tax, funded by replacing the council tax with a local income tax, closing tax loopholes for the wealthy and raising more money from green taxes.

But Mr Clegg wants to go further in making life easier for the majority of taxpayers at a time when living costs are rising sharply.

Once a Lib Dem administration had met spending commitments by reallocating funds from existing and future government programmes, its aim should be to cut the overall burden of tax for most people, he said.

However, he has not specified how much of the £20bn - equivalent to about 3% of government expenditure - could go towards tax cuts.

"As much of that money that we claw back from government, once we have met our spending priorities, should be given back in tax cuts - and tax cuts crucially from the bottom up," he told the newspaper.

Only a "minority" of the wealthiest people in the country would pay more under his party's proposals, Mr Clegg said.

"We are talking about the vast, vast, majority of British taxpayers, say 80% to 90%, who would do better out of our proposals."

Changed stance

The Lib Dems have campaigned on specific tax-raising measures at recent elections and their new tax-cutting stance could provoke arguments among different sections of the party in Bournemouth.

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But Mr Clegg said the deterioration in the economy and the state of public finances meant the "political terms of trade" had changed as far as the debate on public expenditure were concerned.

"We have got a recession looming. At a time when British families are tightening their belts, government should tighten its belt too."

Critics say the Lib Dem policy is politically driven as it faces losing seats to the Conservatives in the south of England at the next election.

The Tories are reviewing their economic plans in light of the economic downturn, leading to speculation that they may abandon their commitment to match Labour spending targets up to 2010-11.