Lib Dem conference: Leaked briefing over tax hike for 2.6m earning over £50,000 blamed on 'a cock-up on top of a mistake'
Andrew Grice has been Political Editor of The Independent since 1998. He was previously Political Editor of The Sunday Times, where he worked for 10 years, and he has been a Westminster-based journalist since 1982. His column, Inside Politics, appears in The Independent each Saturday.
Monday 16 September 2013
Nick Clegg was accused of planning a secret tax hike for 2.6m people today after a leaked Liberal Democrat briefing paper suggested the party would seek to raise taxes for people earning more than £50,000 a year.
The Lib Dem leadership disowned the plan, blaming "a cock-up on top of a mistake", after a one-year-old statement was included in a briefing for MPs attending the party's Glasgow conference and then accidentally emailed to journalists.
The paper, on "lines to take" in media interviews, said: "In these difficult times, it is important that everyone makes their contribution. It is right that we ask the broadest shoulders to bear their fair share: it is unrealistic to cut more money from welfare spending without increasing taxes on Britain's richest.
"We are looking at how the richest 10 per cent of people, those earning over £50,000, could make a further contribution. The vast majority of people in the country would consider £50,000 a very large salary: these are not the middle income earners."
Senior Lib Dems insisted the statement was written after Mr Clegg spoke about higher taxes in interviews during last year's party conference. They emphasised the party had no intention to push for income tax rises for people earning £50,000 in talks with Labour or the Conservatives if the 2015 election ends in another hung parliament.
Officials conceded that a family on £50,000 a year in London would not regard themselves as rich. One senior source said: "We don't retreat from what Nick said last year, which was that we believe we can have fair taxes that target the wealthy. What we do not like doing is drawing a kind of arbitrary income line and say that above that you get clobbered."
A policy statement approved by the Glasgow conference yesterday put the emphasis on taxing wealth rather than income, including a mansion tax on homes worth more than £2m and a possible land value tax. In a knife-edge vote, the conference agreed by 224 to 220 to back the leadership by keeping the 45p top rate of tax rather than bring back a 50p rate on incomes over £150,000 a year.
Mr Clegg accused David Cameron of stealing the Lib Dems' flagship policy to raise the personal tax allowance to £10,000 a year next year. The Coalition's decision will be trumpeted at next month's Conservative Party conference, where "a tax cut for 25m" is the first of six gains "for hardworking people" listed in campaign material. Mr Clegg recalled that Mr Cameron had rubbished the Lib Dem plan as unworkable during the leaders' TV debates at the last election. He told the conference: "We did it, not them. We must never, ever, ever allow the great progressive reforms that we are introducing in this Government to be appropriated by others."
The confusion over the Lib Dems' stance on tax overshadowed a pledge by Mr Clegg to extend the ring-fencing of the health and schools budgets to 2020. He also wants the Coalition to bring in free bus passes for 16 and 17-year-olds, which exist in areas including London but not nationwide. Both measures could feature in the Lib Dems' manifesto in 2015.
Mr Clegg saw off a challenge from his internal party critics when the conference rejected a call by the left of centre Social Liberal Forum for the Lib Dems to distance themselves from "Osbornomics". After the Lib Dem leader put his authority on the line by speaking in the debate, delegates voted not to adopt a Plan B with a new "fiscal mandate" and the Bank of England doing more to create jobs and growth.
At the conference tomorrow Danny Alexander, the Treasury Chief Secretary, will pledge to close income tax loopholes that allow private equity shareholders to siphon money out of their company and partners in partnership firms to structure their staff arrangements to limit tax bills.
Chris Leslie, a Labour Treasury spokesman, said: "Instead of dreaming up ways to hit people on £50,000, the Lib Dems should explain why they have just given a £3bn tax cut to people earning over three times that amount. Nick Clegg talks about fairness, but this private document shows you can't trust a word he says."
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