Speed up tax changes, urges Clegg

25 January 2012 Last updated at 19:48 ET

Mr Clegg says voters want economic competence - and some compassion

Nick Clegg will say later that he wants the coalition government to go "further and faster" in raising the pay level at which people start paying income tax to £10,000 a year.

The deputy prime minister will argue that many families are at financial "boiling point" and need more relief.

The coalition has promised to raise the income tax threshold to £10,000 by the next election, set for 2015.

Labour said Mr Clegg had "a cheek preaching about fairness and tax".

The deputy PM's speech to the Resolution Foundation in London follows official figures showing the economy shrank by 0.2% in the final quarter of 2011.

It also comes ahead of the Budget on 21 March, increasing speculation that changes to tax thresholds could be announced.

Left vs right

Mr Clegg will aim to set out a distinctive Liberal Democrat fiscal position by highlighting differences with the party's Conservative coalition partners.

He will say that those on the right in politics place "less of an emphasis on using the tax system to create greater equality".

He will also attack Labour by saying the "traditional left" supports a "penal rate on the highest earners, simply because it makes them poorer".

At the last election, the Lib Dems pledged to raise the income tax threshold to £10,000 a year and the coalition agreed to implement this policy over the course of this Parliament.

The income tax threshold was raised by £1,000 to £7,475 in the 2010 Budget, and the government plans to increase it further to £8,105 this year.

But Mr Clegg is expected to say: "Today I want to make clear that I want the coalition to go further and faster in delivering the full £10,000 allowance, because the pressure on family finances is reaching boiling point.

"These families have seen their earnings in relative decline for a decade, compared to those at the top. That has accelerated since 2008, with lower real wages and fewer hours at work."

He will argue that the coalition has raised capital gains tax and reduced tax breaks on pension funds "for the very rich", while "clamping down" on tax avoiders to raise an extra £7bn a year.

'Fair tax cuts'

Mr Clegg will also reiterate his commitment to the coalition's aim of ending the UK's deficit, but will promise to do so "in a way that is fair".

"People look to the Liberal Democrats to keep this coalition anchored in the centre ground. They want economic competence, but they want compassion too.

"It is our job to make sure this government delivers both."

Owen Smith, Labour's shadow Exchequer secretary, said: "This is the man who campaigned against a rise in VAT and then introduced it just after he got elected. And his government's Autumn Statement took three times more from families with children than from the banks.

"For the last year Labour has been arguing for fair tax cuts, such as a temporary cut in VAT, to help hard-pressed families and pensioners and kickstart our stalled economy. And we want to see a tax on bank bonuses at the top to fund 100,000 jobs for young people.

"Now that the economy has gone into reverse, these measures should be part of a real plan for jobs and growth in the next Budget."

Continue Reading... Labels: changes, Clegg, Speed, urges

Clegg signals boardroom pay curbs

4 December 2011 Last updated at 09:37 ET

 

Nick Clegg says the coalition will bring forward proposals next month

The government is to publish new proposals to curb "unjustified and irresponsible" pay rewards in the private sector, Nick Clegg has said.

The deputy prime minister said ministers would announce plans to "get tough" on excessive boardroom pay in January and may legislate if necessary.

Among likely steps is widening the membership of remuneration committees, which set pay, to include workers.

Recent figures showed executive pay at the UK's top firms rose 50% last year.

Pay research firm Incomes Data Services said this increase took the average pay for a director of a FTSE 100 company to just short of £2.7m.

Mr Clegg told the BBC's Andrew Marr that these figures were a "real slap in the face" for workers on middle and low incomes, who are seeing their pay frozen.

The government should not be setting pay rates, Mr Clegg stressed, while making clear he supported top executives being well rewarded if their companies were successful.

'Closed shop'

But he said "greater transparency" was needed over the process of setting pay and that top bosses should not be rewarded for poor performance.

"We need to get tough on irresponsible and unjustified behaviour of top remuneration of executives in the private sector," he said.

"What I abhor is people getting paid bucket loads of cash in difficult times for failure."

Remuneration committees, the bodies which set the pay of top executives, were too often "closed shops", resembling "old boys" clubs, and he wanted to "break open" membership of these bodies.

Labour want workers to have a seat on remuneration committees to ensure their voices are heard and Mr Clegg suggested this was one area being looked at.

Business Secretary Vince Cable announced a consultation on how executive pay is determined and measures to empower shareholders at September's Lib Dem conference.

Among ideas floated were requiring companies to set out in the detail the criteria for pay awards.

While the Lib Dems have been keen to act in this area, the Conservatives have been seen as more reluctant although Prime Minister David Cameron has also attacked so-called "rewards for failure".

'Heavy lifting'

Mr Clegg's comments came after it emerged that Lloyds Banking Group is looking to "claw back" up to half of the £1.45m bonus it awarded to its former chief executive Eric Daniels.

The Daily Telegraph reported lawyers have told Mr Daniels and other executives Lloyds is considering withholding part of their bonuses after it announced a £3.9bn loss for the first nine months of 2011.

Although Chancellor George Osborne increased the bank levy in last week's Autumn Statement, the unions say the public sector is bearing the brunt of measures to rebalance the public finances with workers facing a new 1% cap on pay rises after the current two-year pay freeze ends in the Spring.

Mr Clegg said the public sector could not be seen to do "all the heavy lifting" when it came to the government's austerity programme and that people "in a sense living by completely different rules in the private sector" should also be held to account".

As it was essential that the country did not become "divided" in these tough times, he said the coalition must "redouble its efforts" to show its deficit cutting plan was as "fair as possible".

He also suggested he would support well-off pensioners forfeiting their current entitlements to free TV licences and bus passes in future - something that the government has rejected in the past.

Continue Reading... Labels: boardroom, Clegg, curbs, signals