Clegg’s new year: Bankers, mansions and Lords

By Ian Dunt

Nick Clegg has kicked off his new year promising more action to curb executive bonuses, amid continued questions over his leadership.

The interview came as a YouGov survey showed a substantial decline in Liberal Democrat support, with just 25% of people who voted for the party in the last general election saying they would do so again.

The deputy prime minister insisted he was responsible for many of the tougher sanctions against high-earners and tax avoiders, saying he had inserted sections on tax avoidance into the coalition agreement.

"Look at this debate about irresponsible capitalism, what I call crony capitalism," he told BBC Radio 4.

"It’s Liberal Democrats who've led the debate on clamping down on bankers’ bonuses and we must be just as tough this year in the bonus season that’s coming up as we were last year, if not more so."

He insisted there would be a "general anti-avoidance rule" preventing high earners from being able to "play" or "abuse" the system.

Mr Clegg was far more downbeat on long-term Lib Dem plans to introduce a mansion tax, saying "we will see what comes in future Budgets".

The reply suggests that Lib Dem aspirations to place a heavier tax burden on wealth rather than income may have met a wall in discussions with Conservative colleagues.

In return, Tory ministers are not trying to undo the 50p top rate of income tax. Lib Dems have said they will only allow ministers to scrap it if it is replaced with a wealth tax of some sort.

Elsewhere in the interview, it was plain tensions were still high over David Cameron's decision to veto the fiscal coordination plan in Brussels.

"No-one planned for an outcome which left Britain in a position of one," he said.

"There was no real planning or discussion about Britain being in a corner on its own."

Shadow business secretary Chuka Umunnaquickly issued an attack on Mr Clegg's coments, accusing him of hijacking Labour's rhetoric on "responsible capitalism" while still penalising poor and middle income families for the deficit.

"Nick Clegg said no one in government had planned on a position that left Britain in a corner on its own, showing the incompetence of ministers and how they have compromised their ability to fight British business’ corner in Europe," he added.

As the interview took place, new problems arose with Mr Clegg's plans for Lords reform, after Lib Dem peer Lord Tyler questioned proposals to reduce the size of the second chamber to 300.

Opponents of the plan worry it will make the Lords too similar to the Commons, which is expected to have 600 MPs after the next general election.

Media reports suggest that a committee on House of Lords reform will suggest a figure of 450 peers, 80% of whom would be elected.

"What I think is being said by many on the committee, probably the whole of the committee that simply cutting it back to 300 and assuming that everybody’s got to be a full-time parliamentarian would make us too much like the House of Commons and I think the public are expecting to have a second chamber which is very different to the House of Commons," Lord Tyler told the BBC.