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
    +1

    Comment number 1611.

    People who say "the rich will leave if they have to pay more tax" are forgetting that if they leave the country, the million pound pay packets they currently receive from British companies don't leave the country. Anyone who earns this obscene amount of money and complains that they 'only' get to live on £500,000 a year clearly aren't living on this planet!

  • rate this
    +2

    Comment number 1610.

    The rich are the ones who need to be paying more into the country- including the policiticians who pretend to know how us common folk feel when really they all have more money than common sense!
    The country will never be back in good shape until those who are able to help turn it around stop being so selfish and contribute what they can! It's called team work! Talk about some narrownminded people!

  • Comment number 1609.

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

  • rate this
    -3

    Comment number 1608.

    Last week it was the small person in the street getting cash in hand, this week its the rich. Do they actually have a clue? They need to get money flowing and the only way to do that is reduce tax and get people, who can pay into the system rather then taking from it, into work.

  • rate this
    +6

    Comment number 1607.

    1501. Andy The Thinker

    It would be a lot easier just to stop sending £50 million a day to Brussells.
    ---------
    How much does being a US /Hedgiebanker lackie cost us?

    -----------
    #1550
    I must say I feel like going out now and giving a huge hug to a rich man.
    -------
    Some people will do anything for money...

  • rate this
    0

    Comment number 1606.

    Best way you can close down the tax loopholes & get more from the richest? Pass into law an act of parliament that ensures the tax code is printed in clear, plain english, at a standard size and font (arial) and paper thickness then proscribe the thickness of the tax code when printed to no more than a centimetre; if you cant cover everything you need in a tome that thick you don't need to tax it.

  • rate this
    +4

    Comment number 1605.

    I'm reminded of the great Frank Capra film 'it's a wonderful life'.

    It seems that Henry Potter is the man who should now be looked-up-to as a hard working wealth generator, while George Bailey is just an underachieving liberal who wants better lives for his undeserving customers (who should really endeavour to become a 'thrifty working class').

    Welcome to Pottersville…

  • Comment number 1604.

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

  • rate this
    +4

    Comment number 1603.

    Regardless of how much we tax the rich, the poor are always with us.

    As are incompetent, two-faced politicians.

  • rate this
    -1

    Comment number 1602.

    Minimum wage is £6 so roundly £12000 per annum so we have a sysytem that takes the tax off them and another system to give it back because they are poor. And we say we cannot make cuts in the public sector. I don't think so

    If

  • rate this
    0

    Comment number 1601.

    Tax on wealth takes money away from those who may now have no income - a 10% tax for 10 years would leave them with nothing, and having property does not mean having the ability to pay tax - you can't sell a 10th of a house to pay a tax. Second, the wealth or property was at one time income, so it has been taxed once already. Still, Prince Charles owns 54000 hectares, or are the uber-rich exempt?

  • rate this
    0

    Comment number 1600.

    A radical tax regime: every adult gets £6K / annum tax free from the government, and is then taxed at 35% on everything they earn. Everyone's treated the same, there's no benefits trap, people can take small jobs without affecting their state payments, and there's still the motivator that if you do well you can get the rewards.

  • rate this
    +1

    Comment number 1599.

    1545.U14334741

    Can someone please tell Osborne the wealth creators are the people who work in factories creating things, not the people who sit in a boardroom consuming the profits!
    ----------------------------------------------------------------
    How is using the planet's finite resources creating wealth? Eventually all these will have been used so where will you get your "wealth" from then?

  • Comment number 1598.

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

  • rate this
    +3

    Comment number 1597.

    Da rich is spankin us guy! Da average rapper can't get no love these days, not unless they is on da take and scammin an dat. homies rise up to the ever powerful political class and dem 1% crew. Cleggy, Cam and which eva brother is in charge of labour is all the same. Spinning my head wit lies n ting.

  • rate this
    -6

    Comment number 1596.

    The rich pay enough proportionately. This is just evidence of the strange ideas of liberals and should work excellently at the ballot box.

  • rate this
    +2

    Comment number 1595.

    Maybe the government should focus on claiming tax correctly first before changing tax codes!

    I'm only on 20% tax but have just been told I have underpaid my tax by A LOT as I receive thousands in "benefit in kind". The amount claimed is direct expenses for fuel, meals, flights & hotels.
    I advise anyone reading to check your P800 as the government are trying make you pay tax where it is not due!

  • rate this
    +6

    Comment number 1594.

    And still the Government do not "get it". We need to fire the economy to enable us all to spend and fuel growth.
    From almost every angle we are being taxed for a problem that is not of our creation.
    The Government has lost every ounce of credibility in its failure to manage this economic situation. We know who need to be taxed punitively for the mess we are in - the banks.

  • rate this
    -2

    Comment number 1593.

    I am now convinced Nick Clegg has completely lost the plot !! are mp`s going to dip their hands in their pockets !! more chance of winning the lottery !! cut overseas aid and stop ripping our economy into more pieces.

  • rate this
    -4

    Comment number 1592.

    Imagine for a moment that your monthly wage packet was almost halved to pay for someone else to sit on their sofa watching trashy daytime TV. Does that sound fair? Would you stay and be taxed or would you move somewhere where the tax you paid was lower?
    I'm not a high wage earner but I believe in fairness, everyone needs to pull their weight without driving wealth creators away.

 

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