The starting point is to aim for fairer, not higher taxes, says spokesman
Liberal Democrat lawmaker Vince Cable outlined plans for a tax on homes worth more than £1 million (S$2.3 million) and a tightening of rules on capital gains tax.
The property tax, which would charge 0.5 per cent a year on the value of a property above the £1 million threshold, would provide funds to lift four million of the lowest paid people out of income tax, Mr Cable, economic spokesman for the third-largest UK party, told British Broadcasting Corp television.
‘The Liberal Democrat’s starting point is to aim for fairer, not higher taxes,’ he said.
‘As chancellor my priority would be to cut income tax for those on low and middle incomes.’ Property is used in the UK to raise money for local governments, with the highest council-tax levy charged on homes valued at more than £320,000 in 1991. It is unfair that people owning family homes in the top band pay the same as those in houses worth up to £50 million, Mr Cable told the BBC. His proposal would result in a tax of £2,500 on 1.5 million homes and £15,000 on homes costing £4 million.
The Liberal Democrats also want to increase capital gains tax to 40 per cent from 18 per cent for people who are paid in shares, including many in the UK financial services sector, party leader Nick Clegg said.
‘The captains of the universe in the City of London who have been raking in incomes through capital gains won’t like this,’ Mr Clegg told the Independent newspaper. ‘But it’s wrong, just morally wrong, that millions of people on lower incomes are subsidising people on high incomes.’ Mr Cable accused the main opposition Conservative Party and its economics spokesman George Osborne of talking ‘hysterical nonsense’ about the economy after the Liberal Democrats rejected calls for an alliance against Labour Prime Minister Gordon Brown.
‘The country should not be taken in by the hysterical nonsense about the country being bankrupt. It isn’t,’ Mr Cable said. ‘The public doesn’t need George Osborne’s imaginary secret documents or conspiracy theories to work out that the public finances are in a bad shape.’ Mr Cable also said that the Conservatives are being dishonest over their plans for public finances, saying that calculations released to the Liberal Democrats under freedom of information legislation show £53 billion of unfunded extra spending commitments.
These include cutting inheritance tax, giving hospital patients’ single rooms and building a high-speed rail link, the party said in an e-mailed statement. A Conservative Party spokesman declined to comment on the accusations.
Mr Clegg on Sunday rejected an offer from the Conservatives to form an alliance to defeat Mr Brown at the general election that must be held by June next year.
Conservative leader David Cameron said there’s ‘barely a cigarette paper’ between the parties on many areas of policy and used an article in the Observer newspaper to say they should work together to form ‘one national movement that can bring real change’. Mr Clegg said there are fundamental ideological differences between the parties on a range of issues and questioned the sincerity of the Conservative leadership.
‘I genuinely don’t know what George Osborne and David Cameron believe, except for this sense of entitlement that people like them should run the country,’ Mr Clegg told activists yesterday. ‘Where’s the conviction?’ Mr Cable called for an end to bonuses and high salaries for senior civil servants and propose limits to their subsidised pensions in his speech yesterday. He will also back a freeze in the total public-sector pay bill and propose raising the threshold at which people pay income tax to £10,000 from £6,475.
Britain will have to cut spending at the fastest pace since the 1970s to repair the damage the recession has inflicted on the public finances, economists warned last week. The International Monetary Fund expects the budget deficit to exceed 13 per cent of gross domestic product next year, the most in the Group of 20.
The Liberal Democrats published plans to cut £1.82 billion from the cost of governing yesterday, including reducing the number of lawmakers in the House of Commons from 646 to 500, cutting the number of government departments to 14 from 24 and trimming 90 of the 790 advisory non-governmental bodies, known as quangos.
Mr Clegg also readied his party for the possibility of backing away from its policy of abolishing tuition fees for university students. He said at a cost of £2.5 billion a year, the policy might prove unaffordable.
Source : Business Times – 22 Sep 2009
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