Clegg unveils plot to soak the rich: He’d raid pension pots and tax homes worth £2m

Nick Clegg yesterday unveiled plans to soak the rich with taxes on mansions, large pension pots and second homes.

The Lib Dems propose investing in big projects such as building electric railways and 300,000 homes a year if they return to government after next May’s election.

And Mr Clegg admitted these would have to be funded by higher taxes on the well-off.

His party’s ‘pre-manifesto’, a draft of its plans for office, contains the controversial pledge to impose a ‘mansion tax’ on homes worth more than £2million.

Mr Clegg also said capital gains tax – currently 18 per cent for those who pay the basic rate of tax and 28 per cent for higher-rate payers – should be raised.

He called for the rate to be ‘more closely aligned with income tax’ but would not give further details, saying it would have to be decided by the Treasury.

Both policies bring the party closer to Labour, which is hammering out plans for a tax on high-value homes and has said that it would look at the capital gains tax threshold.

A Lib Dem spokesman said there is evidence CGT is being used for tax avoidance as it is levied at a lower rate than income tax. Wealthy people who receive some of their income from shares can pay the lower rate of CGT.

But higher rates would also hit those selling second homes in the UK or holiday homes abroad. The tax is liable on any profit from the sale, and has been enforced with the threat of jail and fines in a recent crackdown by HM Revenue and Customs.

In the past, senior Lib Dems have suggested it could be increased to the same rate as income tax – 40p and 45p for higher and top-rate tax payers.

But there is evidence from the UK and abroad that raising the level of CGT fails to increase revenue as very wealthy businesspeople manage to avoid paying it or defer payment.

The Lib Dems would also reduce the level at which people are eligible for tax relief on their pension pots to £1million from the current £1.25million.

Their policy document says these measures would ‘ensure that those with the highest incomes and wealth are making a fair contribution’.

But the Conservatives claimed the party’s plans would cost up to £19billion more than claimed and would involve ‘more taxes and more spending’.

A Lib Dem spokesman denied this, saying the proposals would be costed next year.

Other measures in the ‘pre-manifesto’ include stricter laws to cut carbon. The Lib Dems propose a ‘decarbonisation target’ which would mean 60 per cent of electricity must come from green energy by 2030. This could lead to higher energy bills for homes and businesses.

The party also wants to give new fathers a ‘use it or lose it’ month off to spend with their newborn and introduce 20 hours a week of free childcare for working families.

…AND SPARE DRUG USERS JAIL

The Lib Dems have called for a ban on jailing people caught with drugs for personal use.

Mr Clegg wants drug users to be given treatment instead – and his party will look at introducing civil penalties for low level offences to avoid giving users a criminal record.

The Deputy Prime Minister said yesterday that sending young people caught with drugs to jail helped turn them into ‘hardened criminals’. But last night former Conservative home affairs spokesman David Davis said the plan was ‘simplistic’ as the threat of jail was known to deter users of hard drugs who have a ‘corrosive effect on society’.

Around 1,000 people are jailed every year for possessing drugs for personal use. Half of these cases involve class A drugs such as heroin.

Also included in the document is a promise to give votes to 16-year-olds in all elections and referenda.

The Lib Dems would pass a ‘Nature Act’ imposing tough targets for achieving clean air, clean water and creating more green space, as well as marine and coastal reserves

They would build 300,000 homes a year (compared to around 125,000 at present) and launch a huge home insulation programme that would cost billions, with council tax rebates for those who take part.

Under-21s would be given a discount bus pass so they can afford to travel to college or work, and the Lib Dems would commit to end the use of landfill ‘in a generation’ by increasing recycling

They would introduce a form of proportional representation for elections and reform the House of Lords. The party would also enforce a Royal Charter on press regulation along the lines recommended by Lord Justice Leveson.