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Picture 14 The Lib Dem leader has given an interview to today's Independent in which he sets out the four demands which he would make in return for some level of support or co-operation if no party wins an overall majority at the general election.

The paper reports his demands as:

  • A shake-up of the tax system to lift four million people out of tax by raising tax thresholds to £10,000, with higher taxes for the rich; 
  • A boost to education spending targeted at children from poor families through a "pupil premium"; 
  • A switch to a greener economy less dependent on financial services;
  • Political reform, including a new voting system for Westminster elections.

"We are not here to play games with other parties," he said. "We are here to secure a big mandate for the big changes we want in Britain. Once we know the lie of the land after the election, we have to work out the best way to do that."

Unlike Lady Williams, Mr Clegg will not say how he would define which of the big two parties has the strongest mandate in a hung parliament. "We are not setting out a mathematical formula of whether it is votes or seats. If you say 'seats' you get a headline saying you are in the Labour corner. If you say 'votes' you are in the Tory corner."

He argued that a "photo-finish" – in which the Tories got a higher share of the votes cast but Labour emerged with more seats – was "conceivable but unlikely". He added: "We will cross that bridge when we get to it."

More here.

Meanwhile, Mr Clegg is also interviewed by James Forsyth for today's Spectator where he attempts to appeal to Right-wingers in advance of an election after which he wants to hold the balance of power:

Mr Clegg says the Lib Dems are the most radical of the lot: they propose no tax rises at all. ‘We’re saying “purely spending cuts”, and for a number of reasons. If you want the economy to grow, you must stimulate demand. Any economist will tell you that the best way to do this is by giving tax breaks to the people who tend to spend more of their money they receive. That is to say, people lower down the income scale.’ He is adopting proposals first advocated by Lord Saatchi when he was Tory Treasury spokesman in 2001: taking anyone who earns below £10,000 out of tax altogether.

‘Even Norman Tebbit thinks it’s a good idea,’ says Mr Clegg, enthusiastically. ‘A lot of people on the conventional right have told me that they believe in tax freedom. Well, our proposal will take 3.6 million out of paying tax altogether. It appeals to people who believe in hard work and initiative. And in people not being held down below the water line by a tax system which hammers the poorest fifth much more heavily than people at the top.’

The other side of his plan, on which Lords Tebbit and Saatchi are not so keen, is abolishing pension contributions for higher-rate taxpayers and a ‘mansion tax’ on properties valued at over £2 million. The Tory inheritance tax cut, he said, would help people who ‘don’t actually spend their money, they just squirrel it away’. Here, Mr Clegg conforms far more to the soak-the-rich Lib Dem stereotype, talking about ‘unearned income’ rather than investment income and saying that capital gains should be taxed as income is now.

But he justifies this by pointing to an unlikely lodestar: the Thatcher government. ‘If the Conservatives had any imagination or verve, they would look back at their own history and realise the last time capital gains and income was equalised was under Nigel Lawson,’ he says. ‘What I am advocating is a Lawson policy.’ From someone who used to denounce Baroness Thatcher with some passion, this sounds remarkably odd.

But, he claims, age has taught him the point of Lady Thatcher. And, indeed, he now seems to see her as something of an inspiration. ‘I’m 43 now. I was at university at the height of the Thatcher revolution and I recognise now something I did not at the time: that her victory over a vested interest, the trade unions, was immensely significant. I don’t want to be churlish: that was an immensely important visceral battle for how Britain is governed. And what has now happened to the British economy? It has gone belly-up because, once again, we have allowed a vested interest [the banks] to run riot.’

Jonathan Isaby

26 comments for: Nick Clegg unveils four demands for a post-election deal in a hung Parliament – as he praises Margaret Thatcher and claims Lord Tebbit’s support for his tax policy

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