Nick Clegg has widened his attack on the Tories by accusing David Cameron of seeking to please middle and higher income earners by “spraying around unfunded moon-on-a-stick-type promises” of tax cuts.
He dismissed the prime minister’s pledge to raise the 40% income tax threshold from £41,900 to £50,000. Cameron failed to spell out how he would fund the cut in his conference speech last week, though Tory sources said it would be achieved through spending cuts.
Speaking to the Today programme on BBC Radio 4, Clegg said on Monday: “You will search in vain for any costed plans from the Conservatives. They are just spraying around unfunded moon-on-a-stick-type promises.”
The deputy prime minister, who has instructed his ministers to “brutalise” the Conservatives on their tax and spending plans, accused George Osborne of delivering a “bombshell moment” last week when he unveiled plans to freeze the benefits for the working-age poor.
The Lib Dems believe the chancellor created an “open goal” for them by exempting the rich from further tax increases and heaping more cuts on the working poor to help eliminate the budget deficit.
As he attacked Osborne’s plan to freeze benefits Clegg sought to portray the Lib Dems as the centre-ground party. He said: “You’ve got on the one hand a Labour party that of course famously just refused to talk about the economy, a leader that just failed to even address the deficit.
“Then you had this bombshell moment last week where George Osborne said very overtly, there is no secret about this now: if the Conservative party were in power on their own they would only ask the working-age poor to pick up the tab for the mistakes made by the bankers in the past. They would be the ones to make the additional sacrifices as we continue to do the difficult things necessary to fill the black hole in our public finances.”
The deputy prime minister answered criticisms that he is failing to spell out how the Lib Dems would meet the agreed coalition target of eliminating the structural budget deficit by 2018 by saying that he was interested in curbing pension tax relief for higher rate taxpayers.
He offered qualified support for a proposal by Steve Webb, the Lib Dem pensions minister, to reduce the £35bn forfeited by the government every year to fund tax relief on pension contributions. This overwhelmingly benefits higher rate taxpayers who pay 60p for every £1 saved in their pension pot compared with lower rate taxpayers who have to pay 80p for every £1 saved.
Clegg said: “It is something Steve is looking at because as he has pointed out the tax relief paid for by ordinary taxpayers in the pension tax relief system goes disproportionately to people who are better off than others. So in a sense you have a distribution of wealth through those tax reliefs from the poorer to the richer. It is something he is looking at but it is not a policy we are committed to yet.”
As he intensified his rhetoric against the Tories, Clegg was also forced to clarify his own plans for a referendum on the EU after Danny Alexander, the party’s Treasury chief secretary, suggested the Lib Dems would agree to hold a vote on the timetable proposed by Cameron.
The deputy prime minister said Cameron had decided to “pluck out an arbitrary date” of 2017 for a referendum that would be held after a “synthetic renegotiation” of Britain’s EU membership terms. “I can’t reasonably be expected to endorse a strategy which I don’t think makes either much sense in practice and confounds and contradicts what we have solemnly legislated on earlier on in this parliament,” Clegg told the Today programme.
He said he stood by the coalition’s pledge to hold a referendum if UK sovereignty is passed to the EU. But Alexander was understood to be speaking with authority when he suggested that in future coalition negotiations with the Tories the Lib Dems would accept Cameron’s proposal for an EU referendum in return for major concessions.
