HIGH-EARNING tax evaders will face a crackdown in a £1 billion (€1.2 billion) drive to cut evasion and close loopholes, senior Liberal Democrats told delegates concerned that the party’s fortunes have been damaged because of the coalition with the Conservatives.
Delegates were also told that significant spending cuts, including changes to welfare benefits, will have to happen.
The 150,000 highest earners, who are set to pay 50p tax from next year, will be subjected to tougher inspections by a strengthened division of the inland revenue, which will bring in an extra £7 billion in taxes before the end of the life of the government in 2015, chief secretary to the treasury Danny Alexander told delegates at the party’s Liverpool conference.
“Just as it is right to ensure that every benefit claim is fully justified, so we must ensure that every tax bill is paid – in full. There are some people who seem to believe that not paying their fair share of tax is a lifestyle choice that is socially acceptable. Not true. Just like the benefit cheat, they take resources from those who need them most. Tax avoidance and evasion are unacceptable in the best of times but in today’s circumstances it is morally indefensible,” he said.
“We will be ruthless with those often wealthy people and businesses who think they can treat paying tax as an optional extra,” he added.
The deliberate focus on tax evasion was seen as necessary by Liberal Democrats, following concerns that too much of the public debate since the government took office has been about spending cuts which will mean some government departments sustaining a 25 per cent cut to their budgets by 2015.
However, delegates openly expressed concern that the actions to come will “disproportionately affect the poorest parts of society”.
Party leader and deputy prime minister Nick Clegg denied that the coalition alliance “relished” the cuts ahead.
He insisted that the UK’s current budget deficit – equal to £1 in every £4 spend by the treasury – could not be left to future generations to pay off.
“The fact of this deficit, which [Labour] created, you and I can’t wish it away. You cannot build social justice on the sands of debt,” he said.
Despite calls by one leading Tory MP for an election pact with the Liberal Democrats at the next election, Mr Clegg said his party will stand candidates in every constituency, “no ifs, no buts”, and he dismissed fears held by some in the party that it would suffer some “mysterious cross-contamination in Whitehall” that would lead it to abandon the values created in 100 years of liberalism.
Saying that he was supremely relaxed about the Liberal Democrats’ future independence, the deputy prime minister, who will deliver his main address to the party today before he heads for a United Nations meeting in New York, said: “For me, it is so self-evident that we are a distinct, proud, independent and separate party and always will be. You can share power with others and still retain your values and that is what we are seeking to do.”
