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Lib Dems propose financial advice to limit repos and 3% spending cut

Liberal Democrats leader Nick Clegg has promised to make financial advice compulsory at the point repossession claims are issued to ensure “repossession is only a last resort” as well as vowing to cut Government spending by 3 per cent.

At a speech to the Institute of Chartered Accountants today Clegg said Government spending had been hugely inefficient and controlling public spending was “crucial”. He announced plans to reign in public sector pay deals and pensions and suggested moving the Treasury to Liverpool in a bid to cut costs.

He said: “There is no need for civil servants who don’t have contact with ministers to be based in one of the most expensive office districts in the world.”

He also proposed abolishing the Child Trust Fund and said the party would concentrate on boosting public services with existing spending plans because “the fiscal position is in such a mess… we simply don’t have additional spare money to pour into our public services”.

Clegg said the rise in repossessions could not be allowed to become an epidemic because it would “turn a housing market slowdown into a full-on slump”. He said banks should agree practices to prevent large-scale repossessions such as “allowing those in arrears because of circumstances beyond their control to move to shared ownership arrangements”.

He proposed that the fiscal rules should be independently monitored rather than having the Government “marking its own exam papers” and said he believed income and gains should face the same taxes, cutting income tax by 4p.

He also attacked the Government’s decision to increase the FSA’s powers claiming it “will prove to be a mistake” and said the Bank of England should be given a stronger role in the regulation of banking. Clegg also said the BoE needs to begin taking into account housing costs when measuring inflation.

He said: “Excluding a measure that has such a profound impact on our economy is daft. It means the Bank can’t act to counteract pressures that cause prices to spiral or to counteract a potential crash.”

Clegg reiterated his and shadow chancellor Vince Cable’s belief that the “least worst option” for Northern Rock is temporary national ownership and slammed the Conservatives for offering nothing but “a confusing series of half-promised tax cuts and half-promised spending commitments”.

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