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Lib Dems to unveil spending plans Clegg unveils spending priorities
(about 7 hours later)
Liberal Democrat leader Nick Clegg is to set out how his party would pay for its childcare and education policies. The Lib Dems have outlined plans to spend billions more on childcare and schools by scrapping tax credits for families on above-average incomes.
The party is expected to find funds to scrap student tuition fees and improve childcare by trimming £7bn from government spending in other areas. The party will redirect £7bn from current government budgets to widening access to childcare and increasing school spending for the poorest.
Mr Clegg will say a Liberal Democrat government would make £3bn of savings by removing tax credits from some better-off families. This will be paid for by cutting some spending programmes and removing tax credits from about 2.5 million people.
It would also cut bureaucracy and reduce spending on roads. Leader Nick Clegg said its focus on priorities required "tough choices".
Last summer Nick Clegg announced he had found £20bn of savings from planned government expenditure, which would be directed to what his party saw as more important priorities, while any money left over could fund tax cuts. Cutting waste
BBC political correspondent Iain Watson said this approach triumphed at his party conference, against those who fiercely opposed further tax cuts. The Lib Dems believe they can cut £20bn in "wasteful" government expenditure, instead putting the money towards pledges such as scrapping tuition fees and making childcare available to every child under 18 months in England.
But his internal critics will be pleased that none of the £7bn of savings to be set out later will be devoted to cutting taxes, our correspondent added. Other commitments include helping schools have the choice of cutting infant class sizes to 15 and raising school spending per pupil for the most disadvantaged children in England to equivalent levels in the private sector.
Instead the money is being diverted to funding better childcare, smaller class sizes and the scrapping of student tuition fees in England. We don't think voters at the next election will be tolerant of any political party which makes big, bold promises without spelling out the price tag Nick Clegg
However, critics could characterise the savings from removing tax credits from better-off families as a tax increase, our correspondent said. Identifying where the first £7bn in savings would come from, Mr Clegg said his party would focus its spending on the "kind of things people really need at a time of recession".
The party plans to raise £3.2bn by abolishing tax credits for better-off households, a measure which would affect about 2.5 million people.
They did not say at what income level the credits would be withdrawn, saying this would depend on factors such as the number of children and the cost of childcare.
Other proposed savings include cutting £980m from the roads budget, scrapping the Child Trust Fund - which would raise £300m - and ditching plans to extend the school leaving age to 18, which the party says will save £300m.
A further £500m would be raised by slashing the government's advertising budget and reducing IT costs.
Mr Clegg challenged the government and the Tories to be upfront about their spending plans and how they would be paid for.
Tax battle
"We recognise that we are now in the midst of an economic crisis which will leave a legacy of austerity in public finances and lean years in public finances for years and years to come," he said.
"That is why we don't think voters at the next election will be tolerant of any political party which makes big, bold promises without spelling out the price tag."
The Lib Dems have committed themselves to using any money left over after meeting their spending priorities to cutting income taxes for those on middle and low incomes.
Mr Clegg won an internal battle at last year's party conference to put forward a tax-cutting agenda at the next election.
But BBC political correspondent Iain Watson said Mr Clegg's internal critics - who fiercely opposed the move - will be pleased that none of the £7bn of savings highlighted on Monday will be devoted to cutting taxes.
The Lib Dems have attacked Labour's response to the downturn, saying ministers have wasted billions on ineffectual measures like the VAT better spent on boosting public housing and transport.
Labour says the Lib Dems' plans are confused and its ambition of cutting both spending and taxes is not credible.