05/10/2014 12:51 BST | Updated 05/10/2014 13:59 BST

Lib Dems Will Raise Council Tax On Rich To Cut Deficit

hief Secretary to the Treasury Danny Alexander speaking during day two of the Liberal Democrat autumn conference at the Clyde Auditorium in Glasgow, Scotland.
hief Secretary to the Treasury Danny Alexander speaking during day two of the Liberal Democrat autumn conference at the Clyde Auditorium in Glasgow, Scotland.

The Liberal Democrats will add extra bands onto council tax to raise more money from the rich and cut the deficit fairly, Danny Alexander has told activists in Glasgow. The Chief Secretary to the Treasury said Liberal Democrat participation in the next government would mean an extra fiscal rule requiring the wealthiest to bear the heaviest burden as spending falls and taxes rise.

Mr Alexander, speaking without a tie or jacket and with his sleeves rolled up, won a standing ovation after insisting only the Liberal Democrats could stop Labour borrowing too much and the Conservatives from cutting too deep.

He said: "We will introduce a new levy on the highest value properties - new bands on top of council tax to end the outrage that a £50 million pound property can currently pay the same as a half million pound home. This new tax will be fair, affordable, and will generate funds that will help our nation to live within its means.

"But I also need to be clear. The entire deficit cannot be removed through taxes on the wealthy. Far from it. Departmental spending will see further reductions, and we will have to keep social security bills under control. We've proposed stopping winter fuel payments to the wealthiest pensioners.

Fellow Liberal Democrats, we are living through momentous times. We are shaping those times. Shaping our country so that power is given back here in Scotland and across the UK. Shaping our economy so it is stronger and greener. Shaping our society so that it is fairer. Be inspired by what our party has achieved in these four short years."

Mr Alexander said he would draw up plans for a further £10 billion to be saved from Whitehall bad practice and waste, designed to be carried out as soon as the next administration takes office. And he told activists work would continue to be done on tackling tax avoidance, scrapping so-called "hybrid mismatches" which he said would bring in hundreds of millions in revenue.

The Chief Secretary said £7 billion had already been brought in from tax avoiders, adding: "We are using psychologists and behavioural economists in HMRC to get the money quickly. Tax dodgers beware - we know where you live, we know how much you owe, and now we know how you think. Your behaviour is unacceptable, and we are coming for our money."

In a rallying cry to activists facing dire poll ratings, Mr Alexander added: "We have rescued the country, and we need to summon up all our courage and resourcefulness to save it again, from a Labour party that would borrow too much and a Tory party that would cut too much.

"Go fight for every vote. For a strong economy, a fairer society, a Britain where everyone has the opportunity to make the best of their lives. Let's make this happen." Mr Alexander expanded on the plans for the mansion tax on the Sky News Murnaghan show.

He said: "The whole reason to put an additional levy on high-value properties is because the council tax system is so unfair, in that a home worth half a million pounds pays the same level of council tax as a home worth £50 million. What we will do is add additional bands, as a national tax, on top of council tax.

"That money will be collected by local authorities and pooled separately and every penny of it - under Liberal Democrat plans - will go towards helping to deal with the deficit and balance the books in the next Parliament."

The party is due to debate the mansion tax on Tuesday and will set out further details nearer the election, said Mr Alexander.