Page last updated at 17:36 GMT, Tuesday, 11 November 2008

Clegg urges 'ambitious' tax cuts

Nick Clegg
The Lib Dems proposed tax cuts in September

Nick Clegg has accused Labour and the Tories of "timidity" in their efforts to kick-start the British economy.

The Lib Dem leader says "ambition" is needed to rebalance taxes so the rich pay for "big, permanent and fair" cuts.

Any tax cuts from the government are likely to be "meagre" while Tory plans are "piffling", he says.

The PM has signalled he backs unfunded tax cuts as a "fiscal stimulus" while the Tories have offered tax breaks for firms who employ jobless people.

The Liberal Democrats proposed income tax cuts for low and middle income earners during their September conference - and have since accused the other parties of "clambering on the bandwagon".

'Piffling incentive'

There has been speculation that Gordon Brown will announce tax cuts in the pre-Budget report, expected next week, and Tory leader David Cameron announced proposals earlier to give National Insurance breaks to firms which employ people who have been jobless for three months.

In a speech to the Royal Commonwealth Society later, Mr Clegg says Britain's response to a global recession should not be "timidity and tinkering".

Now is not the time for small-mindedness. It is a time for ambition
Nick Clegg

"We hear talk of tax cuts emerging from Downing Street, but they are likely to be small, and short term.

"Funded through borrowing, the money will have to be paid back later. So it's meagre tax cuts today, giant tax rises tomorrow from Brown," Mr Clegg says.

"Meanwhile the Conservatives want a piffling incentive for businesses to take on new workers that won't put a penny in the pocket of a single family in Britain. Neither package comes close to what's needed."

He adds: "Now is not the time for small-mindedness. It is a time for ambition. An opportunity to fundamentally rebalance Britain's unfair tax system."

The Liberal Democrats want to cut the basic rate of income tax from 20p to 16p in the pound - which they say would benefit most British taxpayers. They say it would mean someone on 30,000 a year would get nearly 1,000 back.

The party says it would fund the shift by closing tax loopholes benefitting the wealthy, cracking down on tax avoidance, end higher rate tax relief on pension contributions and through green taxes.

Mr Clegg says tax cuts need to be "big permanent and fair - for the people who need them" and should be "funded by making the wealthy pay their fair share".

He also says in the speech that global co-operation is needed to tackle a global recession but will question Mr Brown's argument that Britain is suffering "because of external problems".

"Our country was miserably ill-prepared to withstand this crisis and our addiction to debt helped fuel it," he says.

"If we want to play the blame game, we must appreciate the UK is just as guilty as the United States."



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