Lib Dems - The Party of Tax Cuts

8.41.53pm UTC (GMT +0000) Sat 19th Jul 2008

Lib Dem Leader Nick Clegg says "struggling families should be paying much less tax"

Lib Dem leader Nick Clegg has outlined his pledge to cut taxes for low and middle-income people, as part of his proposals to make "Britain fairer". He said "struggling families" should be paying "much less" tax while "wasteful" government spending should be cut.

Among proposals in a policy document is that the NHS should pay for patients not treated "on time" to go private. Labour and the Tories are committed to the same spending levels but Mr Clegg says they are not "set in stone". Mr Clegg said his party was looking to make £20bn savings in government spending in order to cut taxes for lower and average earners and bring down the overall level of tax.

Mr Clegg wants to close "loopholes" in capital gains tax and pension tax relief which he says favours the better off, and raise green taxes to punish "polluters".

He told BBC Radio 4's Today programme the tax system had to become "much fairer" and the government had to "tighten its belt" - for example by slashing the number of MPs by one third, some defence programmes and even some Whitehall departments.

"I don't accept the assumption from Gordon Brown and David Cameron, that the level of public spending at the moment is cast in stone forever." Later, in a speech launching a document setting out ideas on a wide range of areas, Mr Clegg said his aim was to create "a fair society" and asked: "How can it be fair that the poorest pay the highest portion of their income in tax?" He said "struggling families" should be paying "much less" tax and his party would replace council tax and get "wasteful government spending under control and look for ways to cut the overall tax burden".

"Every tax cut we propose will put more money in the pockets of struggling families, not millionaires," he said. But Mr Clegg told the BBC: "We are quite unapologetic about saying that people who have got a lot of money will pay more, people who pollute will pay more through our green taxes and that some government expenditure, waste at the centre.. that will also be where we get the money from."

Among other proposals in the document are a "care guarantee" that NHS patients who are not treated on time will be able to go private - funded by the NHS. On education they would change schools funding, axe "pointless targets" and reduce "stressful national test". The party also says it would use energy companies' "windfall subsidy" from rising fuel costs to reduce people's bills by insulating homes and through "social tariffs" to encourage people to use less.

It also pledges more investment in renewable energy and to axe plans to build more nuclear power stations, scrap the identity card scheme, have 150 fewer MPs and independently audit MPs' expenses. Mr Clegg said he was taking forward the Lib Dem "tradition" of making the tax system fairer and tax cuts must come from the "bottom up" - which he said differentiated his party from the Conservatives.

Source: BBC