The Liberal Democrats would increase taxes to eliminate the UK’s deficit, according to Deputy Prime Minister Nick Clegg.
In a speech at Bloomberg’s London headquarters today, Clegg said the party will stick to the coalition’s plan to eliminate the structural deficit by 2017/18. But he attacked the Conservatives for relying too heavily on reductions in spending to deliver on the promise.
He said estimates from the Institute for Fiscal Studies suggest without any tax rises around £12bn would need to be cut from welfare spending.
He said: “We’ll finish the job [of eliminating the deficit], of course we will, but we’ll finish it in a way that is fair. So not just through further spending cuts, but also by asking those with the broadest shoulders to make some additional contributions too, including for instance through our banded mansion tax, extending new tax bands to higher value properties.
“The Conservatives have now ruled out asking the very wealthy to pay even a bit more in tax to help the ongoing fiscal effort. Instead they’ve said they’ll take billions more from the welfare budget.”
The speech is part of an effort by the Liberal Democrats to recover from a poor performance in the local and European elections last month and to begin distancing themselves from their coalition partners ahead of next year’s general election.
Clegg said it is “high time to debunk the myth” that the party “lost our soul” by joining the coalition.
He said: “It’s thrown at us day in, day out by an unholy alliance of left and right. From the moment we entered Government – Labour, their supporters in the trade unions, their friends in the press – the Conservatives, their financial backers and their powerful friends in the press have all sought to caricature the Liberal Democrats as a party that has traded in what we believe for a whiff of power.”