Clegg calls for emergency tax on Britain’s super rich

August 29, 2012
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Britain fell back into recession at the end of 2011/XINHUA-File
LONDON, Aug 29 – Rich Britons should face a temporary tax hike to help Britain out of its stubborn recession, Deputy Prime Minister Nick Clegg said in an interview published on Wednesday.

Clegg, who leads the Liberal Democrats – the junior partner in a coalition with Prime Minister David Cameron’s Conservatives – told the Guardian newspaper the super-rich should do more to help Britain out of “economic war”.

Britain fell back into recession at the end of 2011 after climbing out of a deep downturn in late 2009.

The coalition has introduced steep austerity cuts since it came to power in 2010 in a bid to shrink its massive deficit, while Britain continues to suffer the ongoing fallout from the crisis in the eurozone, a key trading partner.

“If we are going to ask people for more sacrifices over a longer period of time, a longer period of belt tightening as a country, then we just have to make sure that people see it is being done as fairly and as progressively as possible,” Clegg said.

“If we want to remain cohesive and prosperous as a society, people of very considerable personal wealth have got to make a bit of an extra contribution.”

Figures released last Friday showed that British gross domestic product (GDP) shrank 0.5 percent between April and June compared with the first quarter.

The centrist Liberal Democrats have previously campaigned for a “mansion tax” on properties worth more than £2 million ($3.2 million, 2.5 million euros).

But Clegg’s political foes point out that he backed Britain’s last budget in March, which introduced tax reductions for top earners.

“He talks about a tax on the wealthiest, but he voted for the tax cut for millionaires in (finance minister) George Osborne’s budget,” said Chris Leslie, treasury spokesman for the opposition Labour party.

Clegg’s proposal appears to indicate a fresh bid to differentiate the Lib Dems’ economic policies from those of the Conservatives.

The two parties have fallen out in recent months on policies ranging from Europe to constitutional reform.

Senior Conservative lawmaker Bernard Jenkin attacked the plan, saying it could “strangle the goose that lays the golden egg”.

“If you go on raising tax on rich people – and that’s why, in agreement with Nick Clegg we have had to cut the top rate of tax from 50p to 45p – you drive wealth abroad,” Jenkin told BBC radio.

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