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
    +5

    Comment number 1371.

    @1348. P Uxbridge
    "1283 is right only pond life will be left with no one pay tax for them to take, pond life will have nothing"

    Sorry where do frogs and newts come into this? I'm fairly certain that the ecosystem of the average pond really doesn't care about tax bands and handouts.

  • rate this
    +2

    Comment number 1370.

    1336.Chris
    4 Minutes ago
    I own my own company. I have no incentive to earn enough to be in the 40% tax bracket so I pay myself whatever is the 20%

    You need a decent accountant.

  • rate this
    +2

    Comment number 1369.

    Interestingly a group of billionaires in Germany recently offered to pay more tax to help the country. They offered 5% of their capital and Merkel turned it down because there was no tax law under which it could be assessed - it was just too problematical for the taxmen and the politicians! There is no provision for anyone to voluntarily pay more tax than is due. Same in the USA.

  • rate this
    -5

    Comment number 1368.

    Well it's a given that everyone thinks 'someone else should pay more tax but not me'. The so called rich feel that too and they will react according to how they are treated, just like everyone else. The debate over the 50% rate showed us that no extra money is raised from punitive tax. The best way to raise more tax is to cut the rate, making the UK a more attractive place to work for high earners

  • rate this
    0

    Comment number 1367.

    Instead of squeezing more money out of a section of the public that already pay a great deal of tax, why not concentrate on making companies pay the billions of pounds of tax they are sliding out of paying? If those companies paid all the tax they should, we would not be in recession.

  • rate this
    +1

    Comment number 1366.

    1304 UU cant have a flat rate tax without a generous personal allowance - 15k taking the poor out of tax. Equally it wont work without ironing out avoidance personal and corporate (corporate allowances for debt interest go as well). However it is the only way to remove avoidance by simplification setting at a level the majority will feel reasonable to pay. Those that dont go to jail. No key.

  • rate this
    -1

    Comment number 1365.

    We must reward those who work hard & punish those that do not! Set a single rate of income tax (30%) & stop complicating the system.
    Close loop holes that prevent the collection of £B’s each year.
    Unemployment should be paid for a max of 5years over a lifetime, & Child benefit should only apply to 2 children.
    Those that abuse the system or see it as a long term career must be discouraged!

  • rate this
    0

    Comment number 1364.

    Here's a novel idea a flat tax rate for all of 30% & raise the threshold to £20k. It's too simple a solution because it would be fair for all & there wouldn't be any room for the ultra rich party donors to duck out of their responsibility to pay.

  • rate this
    +4

    Comment number 1363.

    684. Muumipeikko - you should be in prison for tax evasion. It's that simple, and the fact that you aren't shows how little our laws and governments represent the people.

  • rate this
    +8

    Comment number 1362.

    I keep hearing "wealth creators", they would have no wealth if not for the millions of hard working people on lower incomes who actually run their businesses. Our incomes don't rise but their income and profits surge.

    But we can't say anything or we're labeled as a unionist/lefty dog.

    Are there no patriotic millionaires in our country? they'll all leave unless we do as they say?

  • rate this
    +2

    Comment number 1361.

    The wealthiest in the UK like most Western countries are the corporations. A fair tax system should mean that everybody "pays their fair share." Presently it is fairly clear that some of these, as well as certain individuals do not. Mr Clegg fails to mention this area by this article.

  • rate this
    0

    Comment number 1360.

    No i am not a rich man but Mr Clegg (and Osborne) have no real economic policy that will get us out of the hole they are digging deeper for us thus they are just saying what they think is popular.
    The rich should pay more then the rest of us and i think they are being fare with them. When it comes tax we are not competitive in the global market and it is a global market Mr Clegg

  • rate this
    +3

    Comment number 1359.

    Whatever the rate of taxes, the vital thing is to ensure everyone pays, e.g. there should be no advantage in getting paid in dividends rather than directly.

    The well off should pay a bigger proportion of their income in tax, as they are able to pay for many things outright that ordinary people have to lend to get - houses, cars etc. This means the rich pay much less!

  • rate this
    +1

    Comment number 1358.

    why does it always have to come down to tax why not look at your spending, for example stop paying for single parents on benefits to have driving lessons and put them through their test. i am a single WORKING mum on a low wage i pay for it myself and dont agree with my taxes being paid out in this manner.

  • rate this
    0

    Comment number 1357.

    Yea stop paying benefits to the poor altogether see what happens then.You greedy rich are not paying your fair share and you know it.Leaving it to the low wage workers.Pay up and shut up you have had it good so far why should the poor live in poverty to fund your big baots and fast cars.

  • rate this
    +4

    Comment number 1356.

    Will someone please explain why the tax burden shouldnt fall in line with percentage of the wealth of the economy owned... Why should not those who own 80% of the country's wealth pay for 80% of its upkeep?

  • rate this
    +7

    Comment number 1355.

    The wealthly should pay more to help the poor, that's the basic of most faiths in the world and for social harmony. People who attack people for this belief on the grounds of envy are stupid and ignorant. People only wish for a more even distribution of wealth, not a more even distribution of poverty.

  • rate this
    0

    Comment number 1354.

    BBC dutifully reports Lib-Dem "wealth tax", and Tory "tax-share" trick, failing to question 'moral legitimacy' of so-named "earnings" and so-implied "already unfair tax-burdens"

    All the more remarkable the omission, given supposed British and BBC support for the "fundamental principles of democracy", the necessity of secure equality of individual votes, in ballot and in purse and wallet

  • rate this
    +5

    Comment number 1353.

    @1298 The rich should be "penalised" more, because they can afford to. i'm sure by contributing a few extra quid each you can still afford your little luxuries.

    Well done for earning plenty to live off with your hard work. there are plenty of us who don't have big salaries that still work just as hard.

  • rate this
    +1

    Comment number 1352.

    what an idiot Clegg is. Constantly banging on about a few rich people who can avoid tax easily, while ignoring the likes of amazon and google who do business in this country but pay hardly any tax. If you do business here, you should pay tax on it here or go away, leaving more business for those companies that have bricks and mortar here.

 

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