Laws contradicts Clegg with call to cut 50p tax

 

Companies and entrepreneurs could quit Britain unless the 50p top rate of income tax is abolished, David Laws, the Liberal Democrat former cabinet minister, warned yesterday.

In an interview with The Independent, Mr Laws warned senior Liberal Democrats that their attacks on the Tories could backfire, by making it harder to win policy concessions from their coalition partners. His warning came after three possible successors to Nick Clegg – Tim Farron, Vince Cable and Chris Huhne – used their speeches at the party's Birmingham conference to distance themselves from the Tories.

The former City banker accepted that the 50p rate on earnings above £150,000 a year should remain "for the foreseeable future" but insisted that it must be "temporary". He appeared more sympathetic to plans by George Osborne, his former boss at the Treasury, to scrap the top rate, than Nick Clegg, who told The Independent on the eve of the conference that he would veto the move.

Mr Laws said: "If you got stuck with the 50p rate of tax for a long period, particularly if people felt it was permanent, then there is a risk not only that some people might decide to resite overseas, but particularly that where firms and leadership teams face a choice of coming to the UK or some other business centre, that they might not opt for the UK. My own view is that they are unlikely to take that decision, given that they know the Coalition believes the 50p rate should be temporary."

However, Mr Laws said that cutting the top rate soon would look "extraordinary" and undermine public support. "The priority is to deliver tax reductions for people on low and middle incomes," he said.

Mr Laws, who resigned after just 17 days as Chief Treasury Secretary last year following revelations about his expenses claims, warned there was a "risk" that attacks on the Tories could be seen as "oppositionist". He said: "If we spend all our time throwing stones, then over time we will find it more difficult to get them to be co-operative and constructive on policies that we are pressing. We cannot expect the Coalition to work in our interests and the interests of our voters if we are the party that likes to say 'no' to everything the Conservatives do without having a constructive agenda of our own."

But he argued that the party was right to be more open about its differences with the Tories since the May elections. "The truth is that a lot of good news on things we were delivering was being drowned out by a lot of bad news decisions we had to take to get the deficit back under control," he said. "We are now striking a better balance."

Mr Laws, who gives informal advice to Mr Clegg, admitted the Deputy Prime Minister had a "a very tough time" in the Coalition's first year. But Mr Laws never doubted he would stay the course for this parliament. At the next election, Mr Clegg would no longer be the "fresh-faced outsider".

"But if we deliver on the economy and key social policies, people will have respect for Nick... We are a long way from 2015."

After serving a seven-day suspension from the Commons, both Tory and Liberal Democrat leaders are desperate to see Mr Laws back in the Cabinet. Would he return to the top table?

"I am a strong supporter of Nick, the Liberal Democrats and the Coalition. I will go on doing my best to support all three in any way I can." That sounds like a Yes.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Business Analyst - 12 Month FTC - Entry Level

£23000 - £27000 per annum: Recruitment Genius: A Business Analyst is required ...

Recruitment Genius: Chefs - All Levels

£16000 - £23000 per annum: Recruitment Genius: To succeed, you will need to ha...

Recruitment Genius: Maintenance Engineer

£8 per hour: Recruitment Genius: This is an opportunity to join an award winni...

Recruitment Genius: Telesales Executive & Customer Service - Call Centre Jobs!

£7 - £9 per hour: Recruitment Genius: Are you outgoing? Do you want to work in...

Day In a Page

Isis in Syria: Influential tribal leaders hold secret talks with Western powers and Gulf states over possibility of mobilising against militants

Tribal gathering

Influential clans in Syria have held secret talks with Western powers and Gulf states over the possibility of mobilising against Isis. But they are determined not to be pitted against each other
Gaza, a year on from Operation Protective Edge: A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians

Gaza, a year on from Operation Protective Edge

A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians
Dozens of politicians, bureaucrats and businessmen linked to Indian bribery scandal die mysteriously

Illnesses, car crashes and suicides

Dozens of politicians, bureaucrats and businessmen linked to Indian bribery scandal die mysteriously
Srebrenica 20 years after the genocide: Why the survivors need closure

Bosnia's genocide, 20 years on

No-one is admitting where the bodies are buried - literally and metaphorically
How Comic-Con can make or break a movie: From Batman vs Superman to Star Wars: Episode VII

Power of the geek Gods

Each year at Comic-Con in San Diego, Hollywood bosses nervously present blockbusters to the hallowed crowd. It can make or break a movie
What do strawberries and cream have to do with tennis?

Perfect match

What do strawberries and cream have to do with tennis?
10 best trays

Get carried away with 10 best trays

Serve with ceremony on a tray chic carrier
Wimbledon 2015: Team Murray firing on all cylinders for SW19 title assault

Team Murray firing on all cylinders for title assault

Coaches Amélie Mauresmo and Jonas Bjorkman aiming to make Scot Wimbledon champion again
Wimbledon 2015: Nick Bollettieri - Vasek Pospisil must ignore tiredness and tell himself: I'm in the quarter-final, baby!

Nick Bollettieri's Wimbledon Files

Vasek Pospisil must ignore tiredness and tell himself: I'm in the quarter-final, baby!
Ashes 2015: Angus Fraser's top 10 moments from previous series'

Angus Fraser's top 10 Ashes moments

He played in five series against Australia and covered more as a newspaper correspondent. From Waugh to Warne and Hick to Headley, here are his highlights
Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

EU 'family' needs to forgive rather than punish an impoverished state

An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

Gaza, a year on from Operation Protective Edge

The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
How to survive electrical storms: What are the chances of being hit by lightning?

Heavy weather

What are the chances of being hit by lightning?
World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

World Bodypainting Festival 2015

Bizarre and brilliant photos celebrate 'the body as art'
alt-j: A private jet, a Mercury Prize and Latitude headliners

Don't call us nerds

Craig Mclean meets alt-j - the math-folk act who are flying high