George Osborne downplays Nick Clegg's 'rich tax' call


George Osborne: "I want the wealthy to pay more but I do not want to drive wealth creators away"

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Chancellor George Osborne has warned against "driving away" the UK's "wealth creators" after Deputy Prime Minister Nick Clegg called for a temporary additional tax on the rich.

Mr Clegg argued that those of "very considerable" means should pay more into the system, leading to an angry reaction from several Tory MPs.

He said this should come in addition to the Lib Dems' proposed "mansion tax".

But Mr Osborne said it was important not to deter business from the UK.

In recent weeks there have been several reported clashes between Liberal Democrats and Conservatives over issues including House of Lords reform, airport expansion and plans to redraw boundaries for House of Commons seats.

'National effort'

In an interview with the Guardian newspaper, Mr Clegg appeared to highlight differences over fiscal policy, by suggesting the government could go beyond his own Liberal Democrats' current policy for a "mansion tax" on properties of a high value.

He said: "In addition to our standing policy on things like the mansion tax, is there a time-limited contribution you can ask in some way or another from people of considerable wealth so they feel they are making a contribution to the national effort?" he said.

Mr Clegg said fairness was key to the next steps in tackling the "longer economic war".

"While I am proud of some of the things we have done as a government, I actually think we need to really hard-wire fairness into what we do in the next phases of fiscal restraint," he said.

"If we don't do that I don't think the process will be either socially or politically sustainable or acceptable."

The tax idea is expected to be debated at next month's Lib Dem conference in Brighton, with party sources suggesting Mr Clegg could eventually present it to the cabinet.

But, during a visit to Sunderland, Mr Osborne said: "I am clear that the wealthy should pay more, which is why in the recent budget I increased the tax on very expensive property transactions.

"But we also have to be careful as a country we don't drive away the wealth creators and the businesses that are going to lead our economic recovery."

For Labour, shadow Treasury minister Chris Leslie said: "Nick Clegg is once again taking the British people for fools. He talks about a tax on the wealthiest, but he voted for the tax cut for millionaires in George Osborne's Budget.

"And he has supported a failing economic plan which has pushed Britain into a double-dip recession and is leading to borrowing going up by a quarter so far this year."

Income tax graphic

Mr Clegg's comments provoked criticism from Conservative MPs.

Bernard Jenkin, who chairs the Commons Public Administration Committee, told the BBC: "If the politics of envy made a country rich, we would be a very rich country.

"I think most rich people are contributing far more in tax than other people.

"I know this is not a fashionable view, but if you go on raising tax on rich people - and that's why, in agreement with Nick Clegg we have had to cut the top rate of tax from 50p to 45p - you drive wealth abroad.

"This is a pre-conference, easy-clap line."

Fellow Conservative MP Mary Macleod said: "This is Nick Clegg saying let's try out a few ideas before party conference, probably will cheer up a few Lib Dems to talk about it. But it isn't government policy."

Discussions about tax and spending will take place before the chancellor's autumn statement.

In his interview, Mr Clegg also hinted at a return to cabinet for former Treasury minister David Laws.

Lib Dem Mr Laws resigned as chief secretary to the Treasury two years ago after admitting he claimed expenses to pay his partner rent.

"I have never made any secret of the fact that I want to see David Laws back in government," Mr Clegg said.

He also promised the coalition would stand by its commitment not to build a third runway at Heathrow, despite growing calls from Tory MPs for a change of heart.


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  • rate this

    Comment number 871.

    I don't mind people being rich but I do wonder what 'being rich' means now anyway. In Victorian times, those who got filthy rich (usually at the expense of long-suffering others), often became philanthropists and set up and/or supported worthy causes. You don't see much philanthropy these days among the rich, they are all too busy flaunting it....maybe that is the problem.

  • rate this

    Comment number 870.

    So let me get this straight.
    You want to tax me when I work?
    You want to tax me when I buy?
    You want to tax me when I sell?
    You want to tax me when I'm dead?
    You also want to tax me when I own something that I have already paid taxes on to buy?

    Farcical, you politicians are just a bunch of crooks.

  • Comment number 869.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 868.

    @249. Secretbanker

    Generalise much?
    I would say the vast majority of the wealthy worked damn hard for their money, so why shouldn't they get to keep as much of it as possible? You think anybody LIKES paying taxes? Presumably you think the poor are all saints? That they never cheat?

    This hatred of those who are successful is toxic. I think it came from the political left, but it needs to stop.

  • rate this

    Comment number 867.

    The easiest thing to do to get everyone to pay their fair share of tax is to tax spending rather than income. Richer people buy more stuff so would therefore pay more tax, plus it's impossible to avoid/evade.

  • rate this

    Comment number 866.

    Fairest is to give everyone a 10k tax-free allowance and then tax everyone at the same rate - say 20%. Then close all the loopholes. The filthy rich will pay more simply because they earn more, but will perceive it to be fair because everyone pays the same rate. If you attempt to squeeze the rich too much, they'll just leave the UK and go somewhere with less tax. Pop stars did that in the 70s.

  • rate this

    Comment number 865.

    Sad part is this Idiot has had his 5 minutes of fame but will end up in the Lords or with some Euro job - he hasent got a clue, like his two mates Dave and Gideon.

  • rate this

    Comment number 864.

    Mr Clegg is starting to fight the next election. He is trying to call the left wing Liberals back home, with this madness and all his other pet projects, Lords reform etc. He is trying to persuade his friends that the tail is wagging the dog, and with Mouse Cameron in charge of the Tory party, Mr Clegg is succeeding.

  • rate this

    Comment number 863.

    846.Mark F
    Just now

    I assume you are aware we live in a free market economy, spouting communist claptrap like that, should that ever happen, it will do nothing other drive business away from Britain. I do realise that lots of people want the state to think and provide for them, but taxing people to death is not the answer.

  • rate this

    Comment number 862.

    flat tax is the only answer. More revenue and thousands of unnecessary accounts consigned to the waste bin. Would make the economy more productive and enrich everyone through more job creation, and attract masses of inward investment.

  • rate this

    Comment number 861.

    Why has it suddenly become so offensive to be wealthy? Creation of national wealth is largely achieved by individuals creating Companies which employ millions. Do not begrudge them success or wealth; why throw cold water on ambition? 'Wealth redistribution' is a socialist/liberal pipe-dream which abhors private wealth on the one hand, whilst depending upon it to support others on the other.

  • rate this

    Comment number 860.

    849. yorkshireflatcap

    Lets get all this in perspective shall we? The government has given all our hard earned taxes to the banks, the banks aren't playing ball, now the government is skint! Does this sound familiar?


    No they didn't. Labour had to borrow the money to bail out the banks. The taxpayer is paying interest on the loan though.

  • rate this

    Comment number 859.

    The best tax on the rich would be decent wages and not the poultry levels of the third world economy that we are becoming.
    Quite frankly I need somebody to explain to me how youngsters get a chance to do any thing on the levels of income they currently earn.
    When the rich have this put to them they threaten to leave to country.
    Great ! leave the money behind.

  • rate this

    Comment number 858.

    Clegg is clearly not all there. It is the wealthy that need tax breaks and the poor who should be paying more % wise.
    It is the poor who use the benefit system the most so surely they should collectively pay for it.
    Why would you want to create disincentives for the wealthy and reward the poorly paid.
    This mindless idea is typical of the more left wing thinking people.

  • rate this

    Comment number 857.

    An interesting & slightly misleading graph: What it shows is those earning between £25k & £35k are contributing aprox 1/3 of all tax. Yes the top ten per cent are paying 1/2, but this is a group earning an average of £50K p.a., and whose incomes have been (increasing unlike the majority's). - The throw-away comments of Bernard Jenkin highlights the falsity of Cameron's All in it together claim.

  • rate this

    Comment number 856.

    The poor should pay the greatest proportion of their income in taxes. The rich who are the only section of society who have benefited from this recession and are the ones who when given extra money tend not to spend it should be left alone. The poor who when they are given tax rebates etc, tend to spend and thus increase growth should be the most heavily penalised. G Osborne/N Clegg

  • rate this

    Comment number 855.

    798 DG - at 15k you shouldnt be paying any income tax/NI. But we have high govt spending & high taxes with a complex system of allowances that encourages avoidance. We should have the reverse. Low flat rate taxes (25%) but on all earnings. Simple, fair, effective and when tax is reasonable avoidance ends and tax take increases allowing a 15k personal allowance - job done.

  • rate this

    Comment number 854.

    #812 Dirac Steve

    Yes, Steve, clearly a lot of offshorers like hiding facts and context as mush as their booty.

    The correlation between tax paid as % and wealth ownership as % is always omitted - strange, when you consider how vital the context is to the equation.

    #817 is a perfect example of Daily Mail 'politics'.

  • rate this

    Comment number 853.

    What exactly does he mean by 'the wealthy' ?? Going by past experience it will be anyone currently in the higher tax bracket. Do these politicians not realise they are slowly killing the so-called 'middle classes' in this country who work hard and pay our taxes ?? Wouldn't be so bad if the politicians had a clue, but 99% of them are a waste of space and out for all they can get from the system.

  • rate this

    Comment number 852.

    Same old, go after the easy targets rather than change the system..


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