Cable outlines property tax plan By George Parker in Bournemouth Financial Times Published: September 21 2009 14:56
Vince Cable, Liberal Democrat treasury spokesman, on Monday set out plans to raise property taxes on homes worth more than £1m, as part of an attempt to set out dividing lines with David Cameron’s Conservatives.
Mr Cable said the new levy of half a penny in the pound on homes over £1m would pay for lifting 300,000 low paid workers and pensioners out of tax. This was proof, he said, that the Lib Dems were “committed to fairness”.
His proposal at the Liberal Democrat conference in Bournemouth pleased activists who had become disoriented by calls from party leader Nick Clegg for “bold and even savage” cuts to public spending.
It may also help the party to distinguish itself from the Tories, who have a totemic commitment to scrap inheritance tax for estates worth more than £1m.
Mr Cameron has attempted to woo Lib Dem voters by claiming the Tories share many of their values in areas like civil liberties and the environment.
Mr Cable’s speech included proposals for spending cuts that go much further than anything proposed by the Tories, including plans for a freeze in total public spending and possible reductions to health spending.
He insisted the Lib Dems were more honest about the scale of cuts needed than the Tories and were committed to building a fairer society once the government’s finances had been restored.
Mr Cable’s strongest attacks were reserved for George Osborne, shadow chancellor – whom he portrayed as over-privileged and callow – and the banks, which he said had “lurched from the irresponsible binge lending which caused the crisis to the equally senseless hoarding of capital that is now destroying jobs”.
Clegg proposes tax on homes worth over £1m By George Parker in Bournemouth Financial Times Published: September 20 2009 19:05 | Last updated: September 21 2009 10:00
Owners of homes worth more than £1m would have to pay an extra property tax to subsidise tax breaks for the poor, under plans announced by the Liberal Democrats on Monday.
The proposed 0.5 per cent levy, along with closing tax loopholes exploited by the wealthiest, would help fund a rise in personal allowances to free 4m low-paid workers and pensioners from paying income tax.
Nick Clegg, Liberal Democrat leader, on Monday told the BBC’s Today programme it was “a small correction, which I think would make a big difference to people who are really struggling to make ends meet”.
He said the new tax would affect just under 1 per cent of people, adding: “It’s a fair tax, if you like, that Labour should have done 10 years ago.”
Mr Clegg’s comments may be intended to avert a conference backlash over his plans for “bold and even savage” public spending cuts, with MPs rounding on his proposal to push into the long grass plans to scrap university tuition fees.
The details of the plan will be set out by Lib Dem economic affairs spokesman Vince Cable in his keynote speech to the party’s annual conference in Bournemouth.
Mr Clegg insisted on Sunday that his party was the only truly progressive force in British politics – dismissing as “absurd” suggestions by David Cameron that the party shared the same values – but his spending comments left some in his party angry and confused.
The Lib Dem leader faced accusations at his party conference in Bournemouth that the party risked blurring its identity – long associated with higher taxes to fund education.
One MP said Mr Clegg sounded “nastier than the Tories” and that he was “salivating” over the chance to cut the state. Others complained that Mr Clegg and Vince Cable, treasury spokesman, had “bounced” the party into a hairshirt strategy.
Charles Kennedy, a former leader, criticised the decision to shelve the party’s cherished plan to scrap university tuition fees and Evan Harris, MP for Oxford West, warned the leadership did “not always get its way”.
“People don’t get out of bed and campaign for gloom,” said one MP, pointing out that the strategy on cuts had not been agreed by the party’s frontbench team.
“We aren’t setting out what the sunny uplands look like on the other side.”
Mr Clegg admitted to the Financial Times that he needed to map out more clearly what the Lib Dems would do after the fiscal position had been rectified.
“We have to set out these things in stages,” he said. “If the debate was where it is now, it would be a disaster politically.”
He said the party would see that he believed in “cuts for a purpose – progressive austerity”.
Mr Cable will on Monday refuse to rule out future rises in overall taxes but will say that his priority will be to cut taxes for low and middle income families – a policy which he claims differs vastly from a Tory agenda to cut taxes on the estates of the rich.
He will argue that the country is not bankrupt but he will also say: “We have to set priorities and decide what government should and shouldn’t do. I don’t pretend that the task will be easy or popular.”
Among his proposals is a freeze on the public sector pay bill, a policy not yet cleared by the party’s high command and opposed by some.
“Vince is untouchable,” said one MP on the left of the party.
Mr Cable will also propose cutting tax credits for middle income families and scrapping Trident submarine procurement contracts.
David Cameron seized on a supposed convergence of the two parties’ agenda with his now annual pre-conference attempt to cuddle the Lib Dems to death.
Writing in the Observer, Mr Cameron claimed that Mr Clegg was “drawing dividing lines where they don’t really exist”, arguing that on civil liberties, the environment and decentralising power they were on the same side. Mr Clegg said the claims were nonsense.
Mr Cameron’s strategy is aimed at wooing voters in the Lib Dem heartlands in the south and south west, where the Tories hope to make big gains at the next election.
Meanwhile, the Lib Dems believe there is a large and soft body of Tory supporters who would come across to their party if they were confident that such a move would not let Gordon Brown back into Downing Street.
The party is setting up a group, including southern MPs such as Chris Huhne and Norman Lamb, to target the Tories.
It will hold its first meeting on Monday and aim to promote its argument that Mr Cameron represents “the status quo, masquerading as change”.
Although the mood among delegates on the sunny Bournemouth seafront was generally upbeat, some MPs and delegates believed their party should be doing better than the 18-19 points they have recorded in recent polls.