Lib Dem conference: Millionaires facing tax crackdown in fresh coalition measure


Daniel Bentley
Sunday 23 September 2012 13:04

Anybody worth more than £1 million faces coming under scrutiny from inspectors in a fresh crackdown on tax avoidance announced by Liberal Democrat Treasury Chief Secretary Danny Alexander.

The move will mean 200,000 more people will be targeted by HM Revenue and Customs' affluence unit, set up originally to study the affairs of the 300,000 with assets and property of more than £2.5 million.

Mr Alexander, speaking to the Mail on Sunday at the start of the Lib Dems' annual conference in Brighton, said officials would "sniff out" anybody who was not paying their fair share of tax.

"The measure will apply to people with homes and assets of more than £1 million," he said.

"The wealthiest did best in the boom years and it is right they should pay more now."

Mr Alexander said the affluence unit, boosted from 200 to 300 staff, would cross-reference files and records to spot signs of avoidance.

"They will look at anomalies and sniff out any problems," he said.

A new coalition drive to hit the rich will also include separate moves to stop high-earning BBC personalities from using tax avoidance schemes and fines for tax-dodging footballers.

The initiatives are likely to play well with Lib Dem activists and come as Deputy Prime Minister and Lib Dem leader Nick Clegg vowed to play hardball with David Cameron over the future of the coalition.

It comes as Vince Cable indicated he wants a fresh assault on tax havens and non-domiciled millionaires.

The Business Secretary told The Sunday Times he wants tough action against "shady" wealthy people who make "systematic and cynical" use of offshore havens such as Monaco and the Cayman Islands.

Meanwhile, Energy Secretary Ed Davey will today intensify the battle with Chancellor George Osborne over green measures by backing calls for a target on cutting energy sector emissions by 2030.

He will step up pressure on "blind" Tory sceptics to accept the move by insisting there is "a strong case" for including the measure in the forthcoming Energy Bill.

Mr Clegg admitted at an opening night conference rally that the Lib Dems had made mistakes during their first two years in coalition.

But he stressed it was only "half-time" in the coalition's term of office and rubbished suggestions he would step down before 2015 by promising to fight for the party's values right up to the general election.

"One of the most important ways we can do that is by making taxes fairer," he said.

"Lower taxes on work and more on unearned wealth. I want to reward people who put in a proper shift, not those who sit on a fortune. People for whom a bonus means a few extra quid at Christmas, not a million pound windfall."

Aides said Mr Clegg would insist on fresh taxes for the wealthy - such as the party's favoured levy on mansions - as the price for accepting billions of pounds of extra spending cuts when the coalition sets budgets for 2015-16.

The tactic could force the Tories to decide between agreeing to the policy or abandoning Mr Osborne's key deficit reduction targets.

Acknowledging activists' frustration over student tuition fee hikes, the AV referendum defeat and the collapse of Lords reform plans, Mr Clegg said: "There were times in the first half (of the parliament) when we as a party made errors. And we've learned some hard lessons. When the second half is over we will emerge with a few scars.

"But we will be able to tell people the things we have achieved. Whether it is in school, in work or in retirement, we are showing people we are a party that shares their values: Fairness; openness; compassion; equality; community; diversity."

He delivered a stark warning that failure to maintain discipline and make a success of the coalition would spell disaster for the Lib Dems.

"We are proving that coalition works. But we need discipline. Yes, we must show people that we are different from our coalition partners. But if all people see is squabbling then they will think coalition is a messy, incoherent thing. We must not put the progress we have made in jeopardy by retreating to our comfort zone."

Mr Clegg also lashed out at Tory backbenchers who were seeking to push the Government towards a "turbo charged right-wing agenda", telling them: "You didn't win the last election. You do not have a majority. The British people have not given you the right to act like you do."

In a sign of unease within the party at the possibility of being tied to spending cuts beyond the 2015 election, party president Tim Farron said the Lib Dems must "stand alone" by the time the nation goes to the polls.

Mr Farron, a standard bearer for the party's left, said: "As we go to 2015 we have to continuously campaign as an independent, separate body.

"There is absolutely no question whatsoever in my mind any shared policy, any shared programme or strategy with the Tory party, not a flipping chance.

"No question of an enduring cuts or deficit reduction programme beyond 2015 with the Tories, we stand alone going into that election."

But he defended entering the coalition, even though it was "uncomfortable" for the Lib Dems.

He told a fringe event at the party's conference: "Being part of a government that is doing some of the things this Government is doing is flipping hard. But it would have been flipping spineless to walk away."


Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

View comments