Market leading insight for tax experts
View online issue

Britain’s wealthiest should pay more tax, says Nick Clegg

printer Mail

People of ‘very considerable personal wealth’ should pay a time-limited contribution to the UK’s effort to tackle what has become ‘a longer economic war rather than a short economic battle’, Nick Clegg has said in an interview with The Guardian.

The Liberal Democrat leader and Deputy Prime Minister said: ‘What people once thought might have been a short, sharp economic battle, a short, sharp recession, is clearly turning into a longer-term process of economic recovery and fiscal restraint. That begs big questions …

‘If we want to remain cohesive and prosperous as a society, people of very considerable personal wealth have got to make a bit of an extra contribution. In addition to our standing policy on things like the mansion tax, is there a time-limited contribution you can ask in some way or another from people of considerable wealth so they feel they are making a contribution to the national effort?’

The Liberal Democrats’ former Treasury spokesman Lord Oakeshott told the BBC’s Newsnight last night that the party would continue to push for a mansion tax [on properties worth more than £2m]. ‘The key way that you make sure the wealthy pay their fair share of tax is by taxing their houses,’ he said. ‘That is the one thing they can’t move to Monaco.’

Oakeshott was delighted, he said, that Clegg had returned from his holiday ‘radicalised and refreshed’. The party’s autumn conference will open on 22 September.

But Labour ‘dismissed’ Clegg's intervention, The Guardian reported. Chris Leslie MP, Shadow Treasury Minister, said: ‘Nick Clegg is once again taking the British people for fools. He talks about a tax on the wealthiest, but he voted for the tax cut for millionaires in George Osborne's Budget.’

The coalition government is consulting on a proposed limit on currently uncapped income tax reliefs, which would increase effective tax rates.

When it announced the consultation last month HM Treasury said: ‘Tax reliefs exist for good reasons, to promote activities such as business investment, but it is unfair that reliefs can be used without limit to reduce tax liabilities. This measure will increase effective tax rates and help ensure that those with the highest incomes pay a fairer share.'