Clegg: Wealthiest must help fund tax cuts for poor

Mr Clegg said he was "proud" of his party's contribution to the coalition

Nick Clegg has said the richest must pay their fair share of tax, pledging to "call time on tycoon tax dodgers".

The Lib Dem leader told delegates at their spring conference that it was a "basic justice" that those earning the most should contribute most in tax.

Lib Dems have floated plans for a "tycoon tax" in recent weeks.

The Budget must have "fairness" at its heart, the deputy prime minister added, with plans to reduce the tax paid by the poorest in society speeded up.

In his keynote speech to the two-day event in Gateshead, Mr Clegg said the government must make the wealthiest pay more to help fund tax cuts for the poorest.

The speech was overshadowed by a defeat earlier on Sunday for the party leadership over the government's controversial NHS reforms in England.

Party members voted to oppose proposed changes to the coalition's Health and Social Care bill - concessions which have been championed by Mr Clegg.

Ahead of the Budget on 21 March, the Lib Dems are pressing for tax cuts for those on low incomes to be accelerated and for more measures to tackle tax avoidance by the richest.

'Pulling together'

The Lib Dem leader said a fairer tax system was essential at a time when ordinary families were struggling with the cost of living and wage freezes.

"We need a tax system for a nation pulling together, not being pulled apart. More important now than ever when the forces of division are so strong."

He added: "That is why the Budget in 10 days' time must offer concrete help to hard-pressed, hard-working families," he will say. "I want the Budget to show how we are anchoring this government in the centre ground. Credible - but fair."

The party's top priority is raising the income tax allowance, so that the first £10,000 of income is free from tax.

The coalition has promised to do this by the next election, set for 2015, but Mr Clegg said the government must move "further and faster" towards this goal as an example of its commitment to "real tax cuts at a time of real need".

Mr Clegg said it was a principle of "basic justice" that the wealthiest in society shouldered the greatest burden when it came to tax. He restated his commitment to tackling tax avoidance and evasion, saying such behaviour was "frankly disgraceful".

"Few things make me angrier as the unemployed struggle to find work, as ordinary families struggle to make ends meet, as young people struggle to get on the housing ladder: the sight of the wealthiest scheming to keep their tax bill down to the bare minimum.

"So we will call time on the tycoon tax dodgers and make sure everyone pays a fair level of tax. We've already raised capital gains tax, cut tax reliefs for the wealthiest, clamped down on tax avoidance at the top and we will go further because the Liberal Democrats have a crystal clear approach."

'Tycoon tax'

The Lib Dems have floated a so-called "tycoon tax" and insist it will be considered at a coalition Budget meeting on Monday, although specific details remain unclear.

Energy and Climate Change Secretary Ed Davey told the BBC's Andrew Marr Show that the tax was a "really good idea" and was "consistent" with Lib Dem policy over the years to ensure the richest in society paid their "fair dues".

Asked whether this had effectively replaced the idea of a tax on high-value properties - the so-called "mansion tax" - championed by the Lib Dems but opposed by many Conservative MPs, Mr Davey said that there are "many ways to skin a cat".

Mr Clegg's speech did not include any major policy announcements but instead focused on the achievements of the coalition government and their ambitions for the future.

He defended the party's stance on renewable energy in the face of Conservative criticism over the amount of subsidies for wind farms. The Lib Dems were "the green party in government", he suggested, and claims the UK had to choose between economic growth and a low-carbon future were "a load of rubbish".

He also defended proposed welfare reforms, arguing that benefit claimants "owe it to the nation" to "strain every sinew to find a job".

"That's why I am such a strong supporter of the basic idea driving the coalition's welfare reforms. To make work pay, boost independence and give real help finding a job, rather than leaving people stuck on the dole, enslaved by poverty," he added.

Labour's deputy leader Harriet Harman said Mr Clegg had "let down" his party members and the public at large in a range of policy areas.

"The Lib Dems have made a choice," she said. "In return for ministerial ambition they sacrificed their values to prop up David Cameron's Conservative government.

"They rolled over and let the Tories treble tuition fees, increase VAT, cut 16,000 police, impose cuts and tax rises that go too far, too fast and hit the poorest hardest."