Senior Lib Dems want Nick Clegg to promise a return to 50p top rate

Manifesto should distance party from 'tax cut for millionaires'

Nick Clegg is under pressure from senior Liberal Democrats to fight the 2015 election on a pledge to restore the 50p rate of tax on earnings over £150,000 a year, which will be reduced to 45p.

With Labour expected to promise in its next election manifesto to bring back the 50p top rate, the Conservatives could find themselves isolated as they defend what Labour has dubbed a “tax cut for millionaires”.

Today the Lib Dems joined Labour in criticising George Osborne after the Chancellor suggested that the case of Mick Philpott, the unemployed man who killed six of his 17 children in a fire, reinforced the need for welfare reform.

Danny Alexander, the Chancellor’s Lib Dem deputy who is normally loyal to his Treasury boss, said: “George Osborne is right that there needs to be a wide debate about the future of our welfare system, but the Philpott case is an individual tragedy. Children have died in that case. I think that’s where we should let that case lie. I wouldn’t want to connect that to the much wider need to reform our welfare system.”

Senior Lib Dems say they are appalled by Mr Osborne’s attempt to exploit for political gain what they regard as an exceptional case. Lord Oakeshott, the party’s former Treasury spokesman, said: “George Osborne is not fit to be Chancellor if he cannot see it is wrong to play politics with the deaths of six children.

“You can forgive his immaturity and inexperience in high office, but not this callous cynicism.”

Mr Clegg joined forces with David Cameron last year to block Mr Osborne’s original proposal to reduce the top tax rate from 50p to 40p, but accepted a cut to 45p. The Lib Dem leader’s instinct now is to leave the top rate at 45p and extend the party’s drive to tax wealth rather than income – for example, through the proposed “mansion tax” on homes worth more than £2m.

But Mr Clegg faces a battle with his own party at its annual conference in September over what its 2015 manifesto should say on tax.

Tim Farron, its president, told the Lib Dem Voice website: “Cutting the top rate was a stupid thing to do. It probably raised up to £3bn a year. We should pledge to restore the 50p rate at the next election. It’s not enough to be fair, you have to be seen to be fair.”

Lord Oakeshott said: “In such hard times, we should never have rolled over when the Tories wanted to cut the 50p rate unless we got a mansion tax in return. At the next election, both the mansion tax and a 50p rate should be at the forefront of Lib Dem tax policy.”

Gareth Epps, a member of the Lib Dem tax working group and the co-chair of the Social Liberal Forum pressure group, said: “While the Treasury’s own figures about the 50p are highly questionable, the politics of cutting tax for the very rich make no sense; there is no reason why a 50p rate shouldn’t be part of a solution for tough times.

“However, a higher top rate on its own will not do nearly enough to make the changes we want to see. So we need to see the end to protection of vested interests in the form of unearned income and wealth. A land value tax set against large property estates and developer interests would remedy an unfairness which is centuries-old. That should be a manifesto commitment – not just the first step of a mansion tax.”

Now that the Lib Dems have secured their 2010 pledge to raise the tax threshold to £10,000 from next year, their next manifesto is likely to say it should rise to £12,500, the level of the minimum wage.

Labour has issued figures claiming that a one-earner family will lose an average of £4,000 in the financial year starting today. It said calculations by the Institute for Fiscal Studies showed that gains from the higher personal allowance would be swamped by higher VAT and cuts to tax credits and child benefit.

Ed Balls, the shadow Chancellor, said: “The whole country will today see whose side this Conservative-led Government is really on and who is paying the price for their total economic failure. David Cameron and George Osborne are today giving millionaires an average tax cut of £100,000 while they make millions of pensioners and working people on middle and low incomes worse off.”

Mr Cameron yesterday defended the Chancellor’s controversial remarks on the Philpott case, saying he had stressed that Philpott was “responsible” for his crimes.

“What the Chancellor went on to say is that we should ask some wider questions about our welfare system, how much it costs and the signals it sends,” the Prime Minister said. “We do want to make clear that welfare is there to help people who work hard and should not be there as a lifestyle choice.”

A YouGov poll for Channel 5 News found that 43 per cent of people believe the Philpott case “does raise some serious questions about the benefits system”, but a majority (51 per cent) think it was “just the actions of an evil man and we shouldn’t draw wider lessons from it”.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Kara Tointon and Jeremy Piven star in Mr Selfridge
tvActress Kara Tointon on what to expect from Series 3
Voices
Winston Churchill, then prime minister, outside No 10 in June 1943
voicesA C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
News
i100
Sport
footballBrighton vs Arsenal match report
Arts and Entertainment
Benedict Cumberbatch has spoken about the lack of opportunities for black British actors in the UK
film
News
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

Austen Lloyd: Private Client Solicitor - Oxford

Excellent Salary : Austen Lloyd: OXFORD - REGIONAL FIRM - An excellent opportu...

Austen Lloyd: Clinical Negligence Associate / Partner - Bristol

Super Package: Austen Lloyd: BRISTOL - SENIOR CLINICAL NEGLIGENCE - An outstan...

Recruitment Genius: Sales Consultant - Solar Energy - OTE £50,000

£15000 - £50000 per annum: Recruitment Genius: Fantastic opportunities are ava...

Recruitment Genius: Compute Engineer

Negotiable: Recruitment Genius: A Compute Engineer is required to join a globa...

Day In a Page

Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project
Diana Krall: The jazz singer on being friends with Elton John, outer space and skiing in Dubai

Diana Krall interview

The jazz singer on being friends with Elton John, outer space and skiing in Dubai
Pinstriped for action: A glimpse of what the very rich man will be wearing this winter

Pinstriped for action

A glimpse of what the very rich man will be wearing this winter
Russell T Davies & Ben Cook: 'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'

Russell T Davies & Ben Cook: How we met

'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
Bill Granger recipes: Our chef serves up his favourite Japanese dishes

Bill Granger's Japanese recipes

Stock up on mirin, soy and miso and you have the makings of everyday Japanese cuisine
Michael Calvin: How we need more Eric Cantonas to knock some sense into us

Michael Calvin's Last Word

How we need more Eric Cantonas to knock some sense into us