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| Nick Clegg opens rift with Tories on tax rises to cut the deficit | Nick Clegg opens rift with Tories on tax rises to cut the deficit |
| (about 17 hours later) | |
| Nick Clegg opened up an election argument with the Tories by saying tax rises will be needed after the election to bring the deficit down, as a mistakenly leaked, and hastily disowned, Liberal Democrat briefing showed the party is looking at raising taxes on earnings over £50,000. | Nick Clegg opened up an election argument with the Tories by saying tax rises will be needed after the election to bring the deficit down, as a mistakenly leaked, and hastily disowned, Liberal Democrat briefing showed the party is looking at raising taxes on earnings over £50,000. |
| The chancellor, George Osborne, has declared that the final two years of deficit cuts up to 2017-18 will not require tax rises and can be secured by spending cuts, or possibly by higher than forecast revenues. Clegg said he was "completely against" deficit reduction coming 100% from spending cuts. "We will go into the next election in favour of more fair taxes and not follow George Osborne's plan, since it makes further savings only out of spending cuts. Of course we are not going to do that. That's not Liberal Democrat. It won't happen under my watch." | The chancellor, George Osborne, has declared that the final two years of deficit cuts up to 2017-18 will not require tax rises and can be secured by spending cuts, or possibly by higher than forecast revenues. Clegg said he was "completely against" deficit reduction coming 100% from spending cuts. "We will go into the next election in favour of more fair taxes and not follow George Osborne's plan, since it makes further savings only out of spending cuts. Of course we are not going to do that. That's not Liberal Democrat. It won't happen under my watch." |
| Clegg made the promise as he crushed a leftwing call at the conference to distance the party from the coalition's existing fiscal mandate, and then narrowly defeated a call to restore a 50p tax rate for those earning above £150,000. Clegg beat off the call for a tax rise by 224 to 220 votes, a result that leaves him in full mastery of party economic policy right up to the election. | Clegg made the promise as he crushed a leftwing call at the conference to distance the party from the coalition's existing fiscal mandate, and then narrowly defeated a call to restore a 50p tax rate for those earning above £150,000. Clegg beat off the call for a tax rise by 224 to 220 votes, a result that leaves him in full mastery of party economic policy right up to the election. |
| Clegg also said he wanted to keep a ringfence around spending for health and education right through the next parliament. His close ally, Treasury chief secretary Danny Alexander, will warn the party that austerity will continue after the structural deficit is eradicated in 2018, saying that in the next parliament there "will be another five years shaped by the necessity of fiscal restraint". | Clegg also said he wanted to keep a ringfence around spending for health and education right through the next parliament. His close ally, Treasury chief secretary Danny Alexander, will warn the party that austerity will continue after the structural deficit is eradicated in 2018, saying that in the next parliament there "will be another five years shaped by the necessity of fiscal restraint". |
| He will say: "Our plan means that by the middle of the next parliament we will have eliminated the structural deficit. But that doesn't mean that the country can then go right back to the old bad habits. Our nation's debt will need to be reduced – it wouldn't be fair to pass it on to future generations. The pressures of an ageing and growing population will have to be paid for." | He will say: "Our plan means that by the middle of the next parliament we will have eliminated the structural deficit. But that doesn't mean that the country can then go right back to the old bad habits. Our nation's debt will need to be reduced – it wouldn't be fair to pass it on to future generations. The pressures of an ageing and growing population will have to be paid for." |
| The confidence of Clegg's allies was strengthened after his chief rival, the business secretary, Vince Cable, backed down after appearing to equivocate in his support for the leadership's stance on the economy, infuriating some cabinet colleagues in the party. | The confidence of Clegg's allies was strengthened after his chief rival, the business secretary, Vince Cable, backed down after appearing to equivocate in his support for the leadership's stance on the economy, infuriating some cabinet colleagues in the party. |
| Cable had wanted Clegg specifically to support a call by part of the left for the building of 300,000 homes a year, as well as lifting restrictions on council borrowing powers to invest in social housing. Clegg, though, warned that if Britain "on a whim" followed EU definitions of public debt, so freeing councils to borrow, debt would then have to include taxpayer-funded liabilities such as in the banking system, meaning "debt would go through the roof". He said the Liberal Democrats would review the merits of debt definition. | Cable had wanted Clegg specifically to support a call by part of the left for the building of 300,000 homes a year, as well as lifting restrictions on council borrowing powers to invest in social housing. Clegg, though, warned that if Britain "on a whim" followed EU definitions of public debt, so freeing councils to borrow, debt would then have to include taxpayer-funded liabilities such as in the banking system, meaning "debt would go through the roof". He said the Liberal Democrats would review the merits of debt definition. |
| Clegg had ramped up the divisions with the left over the economy in an attempt to cast a sharp spotlight on how his party had stood firm on the deficit, and so deserved equal political credit with the Tories for the coming recovery. | Clegg had ramped up the divisions with the left over the economy in an attempt to cast a sharp spotlight on how his party had stood firm on the deficit, and so deserved equal political credit with the Tories for the coming recovery. |
| The boost to Clegg's authority was only marred by a briefing note containing lines for MPs to take, mistakenly sent to the media by the press office. The party scrambled to dismiss the briefing document as out of date and "a copper-bottomed cock-up". It confirmed that the party is looking at raising taxes on earnings over £50,000. | The boost to Clegg's authority was only marred by a briefing note containing lines for MPs to take, mistakenly sent to the media by the press office. The party scrambled to dismiss the briefing document as out of date and "a copper-bottomed cock-up". It confirmed that the party is looking at raising taxes on earnings over £50,000. |
| The Lib Dem leader has hinted at raising taxes on the top 10%, but he has not raised the issue recently, instead focusing on plans to levy a 1% mansion tax on properties worth more than £2m. | The Lib Dem leader has hinted at raising taxes on the top 10%, but he has not raised the issue recently, instead focusing on plans to levy a 1% mansion tax on properties worth more than £2m. |
| The party email stated: "In these difficult times, it is important that everyone makes their contribution. It is right that we ask the broadest shoulders to bear their fair share: it is unrealistic to cut more money from welfare spending without increasing taxes on Britain's richest. We are looking at how the richest 10% of people, those earning over £50,000, could make a further contribution. The vast majority of people in the country would consider £50,000 a very large salary: these are not the middle income earners." Clegg has referred to tackling the top 10% before . | The party email stated: "In these difficult times, it is important that everyone makes their contribution. It is right that we ask the broadest shoulders to bear their fair share: it is unrealistic to cut more money from welfare spending without increasing taxes on Britain's richest. We are looking at how the richest 10% of people, those earning over £50,000, could make a further contribution. The vast majority of people in the country would consider £50,000 a very large salary: these are not the middle income earners." Clegg has referred to tackling the top 10% before . |
| Cable was one of many cabinet members to dismiss the document, saying: "It has no official status whatsoever. As far as I understand it there may be some people in the party with a brainstorm, but it is not part of our platform. Our platform is essentially about cutting income tax for those on low incomes and the mansion tax. I don't understand where it came from." The conference did pass a policy document calling for capital gains tax and pension tax reform, as well as further clampdowns on tax evasion. | Cable was one of many cabinet members to dismiss the document, saying: "It has no official status whatsoever. As far as I understand it there may be some people in the party with a brainstorm, but it is not part of our platform. Our platform is essentially about cutting income tax for those on low incomes and the mansion tax. I don't understand where it came from." The conference did pass a policy document calling for capital gains tax and pension tax reform, as well as further clampdowns on tax evasion. |
| But in his setpiece conference speech, Cable refused to soften his warnings that amber lights were flashing over whether the recovery could be hit by house price inflation: "We must not now settle for a short-term spurt of growth fuelled by an old-fashioned property boom and bust and bankers rediscovering their mojo." | But in his setpiece conference speech, Cable refused to soften his warnings that amber lights were flashing over whether the recovery could be hit by house price inflation: "We must not now settle for a short-term spurt of growth fuelled by an old-fashioned property boom and bust and bankers rediscovering their mojo." |
| He said: "David Cameron says I am the Jeremiah, but you will recall from your reading of the Old Testament that Jeremiah was right. He warned Jerusalem would be overrun by the armies of Nebuchadnezzar and in my own book of lamentation, I described how Gordon Brown's new Jerusalem was overcome by an army of estate agents, property speculators and bankers. | He said: "David Cameron says I am the Jeremiah, but you will recall from your reading of the Old Testament that Jeremiah was right. He warned Jerusalem would be overrun by the armies of Nebuchadnezzar and in my own book of lamentation, I described how Gordon Brown's new Jerusalem was overcome by an army of estate agents, property speculators and bankers. |
| "The problem we now have is the invaders are back and they have a bridgehead in London and the south-east of England, and they have got to be stopped." | "The problem we now have is the invaders are back and they have a bridgehead in London and the south-east of England, and they have got to be stopped." |
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