Nick Clegg promises to keep 50p top rate of tax

Deputy PM vows to keep tax level as long it raises revenue, despite calls from chancellor and other Tories for its abolition Deputy prime minister Nick Clegg has promised to keep the 50p top rate of tax despite calls from some of their Tory party coalition partners to have it scrapped. However Clegg said the Liberal Democrats would back abolition of the top rate in the long run 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. As Liberal Democrats gathered for their 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. 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 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 told the Independent. In a separate question-and-answer session in Birmingham on Saturday morning, for upRising, a leadership programme for young people, Clegg also said the country needed to stop relying on financial services as “the locomotive” of the country and redouble efforts to get growing manufacturing and other services. “What we are going through in this country is not just about balancing the books,” he said. If the country thinks that all it needs to do is “have the City of London … and not worry about the manufacturing … the country won’t move on,” he said. He added: “The need to rebalance, to rewire the country.” In the Independent, Clegg acknowledged that the government had to do more to boost growth in the economy, adopting what he called a “Plan A-plus”. “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. Nick Clegg Tax and spending Tax Liberal Democrat conference Liberal Democrats Liberal Democrat conference 2011 Conservatives George Osborne Economic policy Poverty Lisa O’Carroll guardian.co.uk

Posted by on September 17, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.