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Clegg bid to 'rewire' tax system

Clegg bid to 'rewire' tax system

Nick Clegg has said he wants to "rewire and rebalance the tax system" to make it work for those who "play by the rules".

The Deputy Prime Minister is urging the Chancellor bring forward plans to raise the £10,000 personal allowance on income tax.

In a speech to the Resolution Foundation today, he said that gradually raising the threshold is not enough for families who are facing a "state of emergency".

Speaking this morning to ITV, the Lib Dem leader said: “We’ve got to rewire and rebalance the tax system, so that the tax system works for the many millions of people who play by the rules and work hard to make ends meet.

"It shouldn't be there as the play thing for a tiny percentage of people who are the richest in the country, that’s not what the tax system should be about."

Mr Clegg's remarks have drawn criticism from some Conservative backbenchers, including Treasury Select Committee member David Ruffley. Mr Ruffley, appearing on BBC News, said the Deputy Prime Minister was playing politics with the economy.

He said: "In case Nick Clegg hadn’t noticed, the deficit is not falling as quickly as we would like because economic growth is more sluggish than we would like. It’s perfectly clear that he is doing this for political reasons, he’s trying to get a few brownie points.

"He’s trying to bounce the Chancellor of the Exchequer and there are many Conservatives who think there are other, better ways, at this stage, this year, to get economic confidence growing because there isn’t enough economic confidence around.

"I think Mr Clegg needs to understand he can’t push the Tory backbenchers around."

Mr Clegg also spoke to the BBC this morning and accused Labour of presiding over an unfair tax system.

He said: "There was in my view a prolonged period of time, not least under Labour, where the tax system was woefully unbalanced. We had a situation under Labour where a hedge fund manager paid less tax on their shares and capital gains, than their cleaner did on their wages. George Osborne has already taken steps to close that... but we need to do more."

But Labour leader Ed Miliband hit back, saying: "Well, finally, Nick Clegg has woken up to the squeezing of people on middle incomes, but the problem is, who has squeezed the middle? It's this Government. This Government that has put up VAT, this Government that is cutting tax credits and this Government that is allowing energy companies to rip people off on their bills, allowing train companies to do the same.

"I don't think people are going to trust Nick Clegg, or this Government, to help the squeezed middle."

David Cameron saw Clegg's speech beforehand but the Prime Minister's Official Spokesman this morning insisted: "Tax is clearly a matter for the Budget and we make tax decisions in Budgets.”

Green Box: Clegg bid to 'rewire' tax systemClick to open

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