Clegg: Lib Dems to pledge larger tax cuts

by Stephen Tall on September 7, 2008

In an interview with the Telegraph published today Lib Dem leader Nick Clegg makes clear that the 4p basic rate income tax cut the party has already announced is just the start:

Mr Clegg has announced that he will cut £20 billion from public spending, which will be ploughed into tax cuts for middle earners. “We are now in a process of identifying what I believe will be the most radical package of tax- cutting measures for people on middle incomes,” he said. “We will bear down on the ballooning government budgets. Vince Cable and I have been working over the summer identifying about £20?billion that should be reallocated and the vast bulk of it given back through tax cuts.

“We have taken some difficult decisions already to provide tax relief and we are doing some ongoing work… to help the vast majority of taxpayers. There are a number of options we are looking at. We have our pledge to cut the basic rate of income tax by 4p but as we do the sums, as we identify where we are going to get the money from we can become very much more creative between now and the next general election.”

Asked whether he meant that he would go further than the 4p cut he said: “Yes.”

Incidentally, there was much debate on LDV last Friday about where the party’s commitment to £20 billion of public spending cuts originated. After a little investigation, and some help from Lib Dem HQ, the answer is: the party’s 2006 conference. The Lib Dems’ Trust in People policy document approved by members stated:

Since the election, the Government has continued to put forward policies which will consume large amounts of public spending for wasteful outcomes – for example, identity cards, or new nuclear power stations. We will oppose unnecessary expenditure and continue to take tough choices on public spending, demonstrated through a costed alternative programme. Whenever we propose to increase government expenditure for specific purposes, we will seek to ensure that the revenue comes from cutting back on lower-priority areas. To facilitate this, we have established a spending review to identify approximately 3% of total government spending (£15bn a year) that we consider to be misdirected, or of a low priority, which can be reallocated to Liberal Democrat policy priorities.

In 2006, 3% of total government spending did indeed total £15bn. Today it totals £20bn.