Clegg calls for emergency tax on rich

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Nick Clegg has called for an emergency tax on Britain’s richest people to avoid social unrest as the government battles to end a prolonged recession.

In an interview published on Wednesday, the deputy prime minister and Liberal Democrat leader said he wanted to persuade his Conservative coalition partners that the most wealthy should share a greater burden of the austerity drive.

But the comments are likely to be dismissed as a pre-conference season salvo rather than a realistic signal of forthcoming government policy.

George Osborne, chancellor, quickly rejected the idea, warning that the government should be wary of scaring off wealthy people.

“I am clear that the wealthy should pay more which is why in the recent budget I increased the tax on very expensive property transactions,” he said. “But we also have to be careful as a country we don’t drive away wealth creators and the businesses that are going to lead our economic recovery.”

Labour pointed out that despite his rhetoric Mr Clegg had approved plans announced in the Budget for a cut in the top rate of income tax from 50p to 45p from April.

The Lib Dems backed that measure in return for a higher stamp duty threshold and a crackdown on tax avoidance.

Mr Clegg, returning from holiday in Spain, said he wanted a “time-limited contribution” from the richest, over and above the Lib Dem support for a so-called mansion tax on properties worth more than £2m.

“We need to really hard-wire fairness into what we do in the next phases of fiscal restraint,” the deputy prime minister told The Guardian. “If we don’t do that I don’t think the process will be either socially or politically sustainable or acceptable.”

It was necessary for the affluent to make that extra contribution to maintain a “cohesive and prosperous” society, he argued. His ideas include a new anti-avoidance drive and an attempt to prevent the most wealthy using tax breaks.

But Bernard Jenkin, a senior Conservative backbencher, said the proposal could “strangle the goose that lays the golden egg”.

“If the politics of envy made a country rich, we would be a very rich country,” he told BBC Radio 4’s Today programme, dismissing the idea as an easy clap line for the Lib Dem conference.

Baroness Susan Kramer, Lib Dem Treasury spokesperson in the Lords, said she had first heard of Mr Clegg’s desire for the tax from the interview in the Guardian and looked forward to hearing the details.

She added there was a longstanding Liberal Democrat commitment to move away from income tax towards taxes on wealth.

Mr Clegg also confirmed that David Laws, former chief secretary to the Treasury – who resigned soon after the election amid an expenses scandal – would return as a minister, probably in the Cabinet Office.

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