Lib Dem conference: Clegg warning over axing 50p tax

Lib Dem leader Nick Clegg at the 2010 autumn conference Nick Clegg told The Independent a tax cut for the "very, very rich" would destroy public confidence

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Nick Clegg has said axing the 50p top income tax rate too early could "destroy" public support, as the Lib Dems gather for their conference.

The deputy PM said no decision would be taken without "consensus" between the coalition parties on the issue.

The 50p rate on earnings over £150,000 was introduced as a temporary measure under the previous Labour government.

Chancellor George Osborne says it is temporary and has asked HM Revenue and Customs to see how much it is raising.

The five-day conference is being held in Birmingham, with leader Nick Clegg expected to highlight the party's achievements in government.

Delegates are expected to vote on 15 policy motions on issues including welfare reform, adult social care, phone hacking and Lords reform.

'Very dangerous'

There have been calls in recent weeks for the government to axe the 50p rate - 20 economists signed a letter to the Financial Times suggesting it was harming the UK economy and should be dropped "at the earliest opportunity".

The former Conservative chancellor Lord Lawson has also added his voice to those calling for it to be dropped, telling the BBC it was "very dangerous" to the UK's economic competitiveness.

Start Quote

You cannot decide these things without both coalition parties agreeing, without consensus”

End Quote Nick Clegg Lib Dem leader

But Mr Clegg restated his opposition to axing the top rate, without any tax cuts for people further down the income scale.

He told the newspaper: "There is no way that the 50p [rate] is unilaterally going to be dropped in the absence of progress on lowering tax on people on low and middle incomes and looking at ways the wealthiest pay their fair share."

The tax system had to be competitive, but also had to have public support, and if millions of people felt "passed over" as preference was given to the better off "you destroy the very fabric of consensus without which a sensible tax system cannot survive."

Asked if he would walk out of the coalition over the issue, he said it would not come to that: "You cannot decide these things without both coalition parties agreeing, without consensus."

'Completely agree'

The coalition agreement drawn up between the Conservatives and Mr Clegg's party says the government will work towards increasing the tax-free personal allowance to £10,000 - a Lib Dem policy - and that would be prioritised "over other tax cuts".

The chancellor told the BBC he had always said the 50p rate was temporary and it was right to assess how much it was raising.

George Osborne has defended the government's review of the 50p tax

He added: "I completely agree with people who make the point that we've also got to be helping people on lower and middle incomes. And one of the things I've been able to do in the last couple of budgets is lift over a million low-income people out of income tax and I would hope it future budgets to continue to do exactly that kind of thing."

Since their last autumn conference, the Lib Dems have suffered their worst English local elections for 30 years, losing nine councils and 747 councillors.

Mr Clegg told the BBC it had been "a really tough year" but his party would get "stronger in the future".

He said the achievements he would be highlighting included raising the income tax threshold, reforming the state pension and creating more apprenticeships.

But he admitted: "Some people who used to support us don't now."

He added: "It's been a really tough year. We came into government in what were obviously controversial circumstances because we are governing with our sworn enemies the Conservative Party, and, even more controversially, we're having to make very, very difficult and in some cases downright unpopular decisions."

The party will also be considering controversial NHS plans at the conference and members will be trying to pressurise the Conservatives to lock out private sector from health care proposals. A conference committee will consider a request to hold an emergency debate.

About 8,000 delegates are expected to attend the conference at Birmingham's International Convention Centre, where security will be much tighter than in previous years.

Some party members are so concerned at the stringent identity checks that a motion has been put forward for debate on the subject.

The conference will end with a keynote speech by Mr Clegg on Wednesday.


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  • rate this

    Comment number 297.

    re 289.Davesaid
    Thats isn't a very good strategy at all, unless of course you would prefer a Lib-Dem / Labour Government which would be the only possible outcome (or the five year parliament is a paper tiger).

  • rate this

    Comment number 296.

    There can't be that many affected- but it was stupid pseudo class war politics introducing it, now it's hard to drop.
    The best thing to do is drop it when personal tax allowances are increased to something sensible.
    About the only sensible thing the posturing yellow perils have proposed.
    The reduction in the 40p threshold was far more damaging.

  • rate this

    Comment number 295.

    "Tio Terry
    You know nothing about EU Contracting and Tendering laws."

    Well, I presumed you would have to perform lots of site visits that would then expose you to personal tax liability in the UK, not commenting on whether you were able to get the business. In responding to tenders, then I suggest you don't use your iphone as it won't impress.

  • rate this

    Comment number 294.

    #63: "I would vote for everyone is paid a salary and expenses abolished."

    I agree with you if "expenses" (really "allowances") are being used as a means of tax avoidance. However, for most people "expenses" are reimbursement of money spent by an employee on company business - or do you propose that if I travel on company business I should pay air fare, hotel bill, etc. out of my own pocket?

  • rate this

    Comment number 293.

    The 50p tax is simply not enough for the selfish public-school educated morons who have destroyed this country. They should be in prison not getting tax breaks.

  • rate this

    Comment number 292.

    The 50p personal tax rate has got nothing to do with companies going abroad. Companies pay corporation tax. The Tories only want to scrap it to placate their own kind and the rest of us will keep being kept down having to pay more and more for energy etc whilst receiving less in our pay pockets

  • rate this

    Comment number 291.

    What is the point of Nick Clegg?

  • rate this

    Comment number 290.

    I earn the top rate - I have just put everything I earn over 150k into my pension and basically reduced what I used to spen on cleaner, gardener and decoraors etc

    My colleagues are doing similiar"

    That does not surprise me. However, the max amount you can get relief on is now £50K, including employer contributions, so be prepared for a nasty surprise at tax return time.

  • rate this

    Comment number 289.

    I should think all the Tory MPs are fed up to the teeth with Clegg keeping on about what HE is going to do & what HE has done. The time has come for Cameron to tell Clegg neither him or his party, runs the country & if he persists in making silly announcements then the coalition no longer exists & goodbye all you loony libs.

  • rate this

    Comment number 288.

    Tio Terry
    Just now


    That's all perfectly correct, what's the problem?

    No problem for me, I earn that a day, but then again I'm not so successful I can give 80% away.

  • rate this

    Comment number 287.

    It is surely bizarre that there is a debate on reducing the 50p tax rate at a time when all of us are incurring the ridiculous burden levied on us by the extremes of the criminal banking sector. Yes people who earn over £150,000 have done well but they are being awarded appropriately and any complaint only shows their lack of awareness for those who work so that they may prosper.

  • rate this

    Comment number 286.

    Dear kpjjf , how can large corporations boost our economy simply by paying the directors more money from their profits? This is how I view your cloaked comment.

    re. "and getting those claiming social security back to work." ... the Government is not concerned enough to create decent jobs so that people can go out to work. The Government wish to pay less to those unable to work .. understand?

  • rate this

    Comment number 285.

    I earn the top rate - I have just put everything I earn over 150k into my pension and basically reduced what I used to spen on cleaner, gardener and decoraors etc

    My colleagues are doing similiar

    The people being impacted are certainly not me.

    I am not a banker.

  • rate this

    Comment number 284.

    re: 279.MJRPEEL
    Were your suggestion coupled to a relaxation for small businesses of just some of the mountains of red tape and general wasting of time chasing governement bits of paper and negotiating around crack pot legislation would work for me.

  • rate this

    Comment number 283.

    So its conference time again. Lies, lies and more damn lies.

  • rate this

    Comment number 282.


    That's all perfectly correct, what's the problem?

  • rate this

    Comment number 281.

    Not bothered about the 50p rate. But those of us that earn just over £100K pay nearly 70p per pound earned; due to the reduction in our tax-allowance at the rate of £1 for every £2 we earn over £100K. This hardly ever makes the news, but affects far more people than those earning £150K+

    I don't expect sympathy and I willingly pay my FAIR share - as things stand this is hardly fair!

  • rate this

    Comment number 280.

    Does "The Unacceptable Face of Capitalism" ring a bell?
    We have the "rich" who caused this mess being "forced" to go overseas.
    What is forcing them overseas?
    They want to believe that it is the 50% tax rate.
    The truth is that all that is forcing them is their own immoral irresponsible GREED.
    If the rich had any morality they should be clamouring for a 60% tax rate!
    They are NOT suffering!

  • rate this

    Comment number 279.

    What Britain needs is a flat tax of ~25%, starting at >£10,000. The net result would be a considerable increase in the overall tax take and it would be totally fair. You earn 10 x someone else, you pay 10 x the tax they pay. It would attract a huge influx of talent from overseas and many businesses and start-ups. It would then be up to Government to introduce a law for a balanced budget.

  • rate this

    Comment number 278.

    Tio Terry
    8 Minutes ago


    Sorry but the link takes me to post 139, I don't understand what you are saying.

    Yes 139, it's your post.
    you said earlier your business was successful, that's what I am saying.

    Quote from your post
    "If I told you your rate of pay was £1000 a week but your take home was £200 how would you feel, because that's my situation".


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