Britain’s Liberal Democrat party leader Nick Clegg has denied plans to “soak the rich” but suggested it was right to consider ending pension tax breaks for the wealthy.
Mr Clegg said there was a “legitimate debate” to be had about poorer taxpayers footing the bill for pension relief for the rich.
He also insisted that the Lib Dems were winning public support for their plan to impose a “mansion tax” on large properties, as the party sought to draw dividing lines with the Conservatives over how to balance the nation’s books.
Yesterday, in a thinly-veiled attack on British chancellor George Osborne, he dismissed as “wild” Tory calls for £10 billion (€12.5 billion) to be slashed from the welfare bill after 2015.
Mr Clegg acknowledged that further austerity would be needed, but said: “Whoever is in government after the next general election will have to embark upon new belt-tightening -more savings, more cuts. That is just a reality, an inescapable one.
“What I am saying is, that being the case, we have got to decide now as a matter of principle how we approach that difficult task.
“My view is that you start at the top and then you work down, you don’t start at the bottom and ask the poorest to make the greatest contributions and then work up. There are numerous ways that you can do that, we have always advocated a change to the tax system applied to very high-value property.
“It cannot be right that an oligarch in a £4 million palace in central London pays the same council tax as someone in a four-bedroom family home. That’s not right, that’s why we want to change it. We haven’t yet won that argument but it’s an argument that we are going to continue to make every single day.”
The Lib Dems have pressed the case for a mansion tax since entering the coalition in 2010, but have so far faced resistance from their Conservative senior partners.
But Mr Clegg said: “I think the argument is coming in our direction because, as more and more people accustom themselves to the idea that we are going to have to make more savings, this whole issue is going to be thrown into sharp relief.
“I think more people are going to say in the country at large, if we have to make more savings, why are we not asking these people at the very top to make more of a contribution?
“Not to soak the rich, but simply to make sure that the people at the top contribute their fair share to what is, after all, a very difficult national endeavour.”
The Liberal Democrat manifesto at the 2010 election proposed a £5.45 billion saving from ending higher rate pensions relief.
Mr Clegg said: “Of course you need to consider all of these things and the point... about tax relief is that tax relief doesn’t come free, it’s other taxpayers paying their taxes to provide a tax relief for people who are much richer than them.
“I think it’s a perfectly legitimate question, the principle is where you have relief in the tax system who pays for whom?
“I think most people would think surely it shouldn’t be people on lower incomes paying taxes to give tax relief in very large quantities to people who are considerably richer than them.
“Of course tax relief should exist in the pension system because it encourages savings, but there is a legitimate debate to be had now: who pays for whose tax relief.”
PA