Deputy Prime Minister Nick Clegg is urging his Tory coalition partners to impose a levy on Britain’s “super wealthy” to fund a £1 billion tax giveaway for ordinary families.
The Liberal Democrat leader said he wanted Chancellor George Osborne to take advantage of the improving economy to raise the threshold at which people start paying income tax to at least £10,500 before the next general election.
He also criticised the Conservatives for their “ideological” commitment to a smaller state, insisting there had to be a balance between reducing the debt burden and providing decent public services.
Mr Clegg said his plan to raise the personal allowance would be worth £100 a year to 24 million ordinary rate taxpayers while taking about half a million people out of income tax.
“As the recovery is finally taking hold I think it is very important that as many people as possible feel that they are benefiting from it. That’s why I call it a workers’ bonus,” he told The Andrew Marr Show.
However, he acknowledged that the Conservatives were currently not signed up to the proposal.
While the Lib Dems achieved their commitment to raise the personal allowance to £10,000, Mr Clegg said he had to fight the Tories all the way.
“The Conservatives before the election felt this was not an affordable policy. I’ve insisted all along that it is affordable,” he said.
In a further move to distance himself from the Tories, Mr Clegg rejected David Cameron’s call in his Guildhall speech last week for a “permanently” smaller state sector.
“You appear to have this view from the right now that taxes should never go up and that you should be shrinking the state to ever smaller size in a slightly ideological way.
“I don’t think we should be ideological about this,” he said. “We can strike the balance in the years to come, whoever’s in power in the next parliament and beyond, in bringing down the debt burden as a proportion of the country’s wealth … but also funding decent public services in a way which millions of people depend upon.”