Page last updated at 14:12 GMT, Sunday, 14 September 2008 15:12 UK

Tax battle reflects Clegg ambition

By Gary O'Donoghue
Political Correspondent, BBC News, Bournemouth

Nick Clegg
Nick Clegg's election has seen changes in policy as well as style

This time last year it wasn't the Labour party that was engulfed in internecine trench warfare over the leadership question, but the Liberal Democrats.

The then leader, Sir Menzies Campbell, resolutely told his party conference that he would "lead this party into the next election with energy, ambition and determination".

Scarcely a month later, Sir Ming had gone, tired of the constant jibes about his age and appearance.

Step forward the 41-year-old, telegenic, relaxed Nick Clegg, the embodiment of youthful vigour that so many thought was lacking in his predecessor.

Here was a man with a young family, an easy style and someone who managed to wear his relatively privileged background lightly.

But the last nine months have not principally been about a change of style - striking though it is.

Tax direction

The real change has been in some key areas of public policy, and not everyone in his party likes it.

Take tax. The party went into the last election promising a 50 pence upper rate and prior to that they'd fought elections on the basis of a penny on income tax for education. It was a badge of honour, worn proudly, a distinctive, bold policy and the activists loved it.

But even under Sir Ming a change had already begun.

Out went the 50p upper rate and in came a pledge to cut the equivalent of 4p from the basic rate of tax, paid for by soaking the rich.

That was, the party told us, fiscally neutral; in other words, it paid for itself.

But Nick Clegg has taken this approach a whole lot further.

Now he says the Lib Dems will campaign at the next election as the tax cutting party.

Some 20bn is to be slashed from public spending, some of it re-spent on other priorities, but a good portion of it handed back in more tax cuts for low and middle income families.

So far only around 5bn of these savings have been identified - scrapping ID cards, the child trust fund and getting rid of "a department or two" from Whitehall. Bit by bit we should learn where the rest is meant to come from.

But that's not really the point.

Search for distinctiveness

Ever since the Iraq war faded as a key issue in British politics, the Lib Dems have been casting around for an issue or two that would mark them out from the rest.

And once the Tories had made it clear that they weren't going to be promising big tax cuts at the next election, then they saw a political opening.

So not only will taxes be cut, but the overall tax burden would fall under a Clegg government.

It's been a bit of a shock to some in the Liberal Democrats. Not so much a lurch to the right, but a stagger all the way across the political spectrum. A folly, said one MP.

It's a policy that will be tested on the conference floor tomorrow and there's a quiet confidence within the leadership that it will get through without too much bloodletting.

In truth, they want a bit of a fight over it. Since in this media-dominated age, that's a sure-fire way to get the coverage the Lib Dems constantly complain they're cheated of.

It's undoubtedly a bold approach.

A tax cutting message should appeal to Tory voters in the south, while the higher taxes on the super rich should aid the Lib Dems in their battle to take seats from Labour in the north.

And Lib Dem activists are not fools. They have spent years tailoring their message in different parts of the country and, for now, they'll give the Clegg strategy a chance.

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