Clegg: Tax system needs ‘fundamental change’

Liberal Democrat leader Nick Clegg has called for a “fundamental rebalancing” of Britain’s tax system today, as the party goes toe-to-toe with Labour and the Conservatives over proposed tax cuts.

Tory leader David Cameron made a speech this morning calling for tax incentives for companies which employ people who have been on unemployment benefit for three months or more.

Meanwhile, Gordon Brown used his press conference this morning to fuel rumours of upcoming tax cuts in the pre-budget report, which could come as early as this week.

In his speech to the Royal Commonwealth Society tonight, Mr Clegg branded both of the other parties’ plans as “timid tinkering”.

“The Conservatives want a piffling incentive for businesses to take on new workers that won’t put a penny in the pocket of a single family in Britain,” he said.

“No wonder people are cynical about politics. All they get from the government and the official opposition is timidity and tinkering.

“Now is not the time for small-mindedness. It is a time for ambition – an opportunity to fundamentally rebalance Britain’s unfair tax system.”

The Liberal Democrats were the first to announce their tax cutting plans, making them the set piece of their party conference during the summer.

The plans would reduce basic rate income tax by 4p in the pound, giving nearly £1,000 back to a worker on £30,000 a year, according to the party.

Officials say this would be funded by closing tax loopholes enjoyed by the very wealthy and increasing green taxes, but some commentators argue the proposals are un-costed and need to be more specific.