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Clegg: Cut taxes and slash back spending to ease recession pain
Paul Waugh and Nicholas Cecil11 Sep 2008
Liberal Democrat leader Nick Clegg today called for deep tax cuts for millions of Britons as he warned that the voters expected the Government to tighten its own belt in the "looming recession".
In an interview with the Evening Standard, Mr Clegg detailed plans to slash £20 billion from public spending and urged ministers to "give back" a large chunk of the savings to nine out of 10 people.
Setting the scene for his party's annual conference in Bournemouth starting this weekend, he attacked Labour's "years of extravagance" in pouring billions into the NHS and other areas without necessary reforms and predicted that the economy would get a boost if tax cuts were awarded to all but the richest. But in a move that is sure to be seized on by his critics, Mr Clegg made plain that upper rate taxpayers should be asked to pay more in tax - and claimed that £2.5 billion could be saved if families on "above average" incomes were barred from receiving tax credits.
Ten months after being elected to replace Sir Menzies Campbell, Mr Clegg also admitted that the public were only just "getting to know me" and conceded that the party would need to work "very hard" to hold onto its clutch of five Lib-Dem seats in south-west London.
Mr Clegg's bid to dump his party's tax-and-spend image faces its first true test in Bournemouth when the conference votes on his plans. The party has already proposed cutting 4p from income tax, funded by a mixture of green taxes, the abolition of tax relief for the wealthy and replacing council tax with a local income tax.
But the leader wants to go much further by reducing Whitehall spending by £20 billion - equivalent to three per cent of the total - and redirecting the savings to a mixture of tax cuts and different spending priorities. Savings would be found by ditching the ID cards scheme and scaling back the NHS IT programme and the child trust fund. The proposals, which could face vociferous opposition when put to a vote on Monday, appear to outflank the Tories' decision to match Labour's spending plans to 2010 and put pressure on George Osborne to propose bigger cuts himself.
Mr Clegg admitted the Lib-Dems had urged higher spending in the past, but said that the political "terms of trade have changed" thanks to soaring food and fuel bills being faced by voters.
"We've got a recession looming, at a time when British families are tightening their belts, government should tighten its belt too. As much of that money that we clawback from government, once we've met our spending priorities, should be given back in tax cuts - and tax cuts crucially from the bottom up."
When asked how many people would benefit, Mr Clegg replied: "Those people who would be paying more would be a minority of taxpayers at the top. We are talking about the vast, vast majority of British taxpayers, say 80 to 90 per cent, who would do better out of our proposals."
When challenged that his performance in the Commons during Prime Minister's Questions has been widely considered to be poor, Mr Clegg responded: "I'm in an unusual position in the sense that unlike David Cameron and Gordon Brown, I have only two questions, Cameron has got six, and he has got a nice prop (the dispatch box) which he can lean on.
"I have got 500 grown men and women yelling at me."
Reader views (2)
Good for Nick Clegg. The government are spending twice as much as when they came in in 1997, and much of it's on failed IT schemes and crazy ideas like ID cards. It's time to give some it back.
- George, London, 12/09/2008 22:02
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Just remember one thing with Clegg. He had his party vote one way in the Commons and another way in the Lords to ensure that the Lisbon Treaty (and provincial status for the U.K.) were shoved down Brits' throats. Don't trust a word this man says.
- Phil Jones, London UK, 12/09/2008 10:23
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