New council tax bands as Lib Dems say rich have to pay for deficit

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.

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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.

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.”