Clegg hints at 2015 exit amid tax plan unveiling

Deputy Prime Minister and Lib Dem leader Nick Clegg. Picture: John Devlin

The Deputy Prime Minister Nick Clegg has issued a timetable for raising the income threshold to £12,500 by increasing to £11,000 in the 2015 autumn statement immediately after the election.

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The increase, if the Lib Dems find themselves in coalition again, will give 29 million people a £100 tax cut on top of the £800 achieved by the coalition government since 2010.

But Mr Clegg said he would pay for the income tax cut by raising capital gains tax for people on the 40p income tax rate. A source close to Mr Clegg said that the new capital gains rate would probably be 35 per cent instead of the current 28 per cent which would raise an extra £500 million.

They would also raise an extra £250 million by cutting the tax free threshold on sales of assets and shares from £10,900 to £2,500.

Mr Clegg attacked the Tories for copying his party’s policy on raising the income tax threshold to £12,500, but said that, unlike them, his party has a plan to pay for it.

Mr Clegg said: “Liberal Democrats believe in opportunity for everyone, not just a few at the top, and letting you keep more of your own money is central to that. We have cut your taxes in this Parliament and we will continue doing just that in the next.

“This is about priorities. The Conservatives may have copied our flagship policy but they would pay for it in a deeply unfair way – by hitting the working poor.

“And the Conservatives want to cut taxes for the better off by nearly five times as much.

“The difference between the Liberal Democrats and the Conservatives is that we want to cut taxes for working people, paid for by the wealthiest, they want to cut taxes for the wealthiest, paid for by the working poor.”

Meanwhile, addressing his own future he insisted that he “not the Duracell bunny”.

He said: “I think there are other things to do in life, and I’m thankfully not one of those people who’s so obsessed with politics that I want to be in politics forever. But I would like to see the Liberal Democrats in government after next May.”

He added: “Not a great deal. I’m 47, I’ve got three little kids, I’ve got lots of interests outside politics and lots of friends outside politics. I’m frankly too busy to do that. You should be dedicated to your job but not obsessive about it.