Lib Dems promise tax cuts

Nick Clegg wants to reduce taxes 'from the bottom up'

Tuesday, 20, May 2008 12:00

The Liberal Democrats have announced a new tax policy today, with promises of tax cuts for low and middle income families.

In a speech in London this afternoon, the party's leader, Nick Clegg, marked a change of direction for the Liberal Democrats.

"We are not ready to accept the government's proposed overall level of taxation, and will look in depth at whether it can, and should, be cut," Mr Clegg said.

"Excessive tax can do enormous damage – especially to the poorest families, whose power in our society is already so limited. That is why the Liberal Democrats will focus all our attention on cutting taxes - from the bottom," he continued.

Despite the significant change in the party's policy, plans to reform capital gains tax – the main current of economic spokesman Vince Cable's thinking on wealth distribution – remain firmly in the party's plans.

Other proposals include cracking down on tax avoidance and a reform of pension relief plans so that high-rate tax payers are only offered a limited relief.

Mr Clegg will promise to tighten loopholes allowing businesses and individuals to do business in the UK but keep capital in off-shore trusts.

The new policies follow Lib Dem calls for non-domiciles to be treated as British citizens after seven years, a measure they announced at their 'New Deal for the City' press conference earlier in the month.

Responding to the speech, Labour's financial secretary, Jane Kennedy, said: "Today Nick Clegg U-turned on public spending. After backing Labour's spending plans just a few months ago, he is now planning to cut public services."

"Families across Britain won't see the Lib Dems as a serious Party when they plan to cut their tax credits, scrap their Child Trust Fund and cut their public services."