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Alexander to Pledge to Tax Assets of Rich in Break From Tories

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Sept. 17 (Bloomberg) -- Chief Secretary to the Treasury Danny Alexander will pledge that his Liberal Democrats will seek to tax the assets of Britain’s wealthiest, as the party seeks to distance itself from its Tory coalition partners.

“Taxes on the very wealthy will be one of our central promises for the next Parliament,” Alexander will say in a speech to delegates today at the party’s annual conference in Glasgow, Scotland, according to extracts released by his office. “Our nation’s debt will need to be reduced” with five years of further spending cuts to eliminate the structural deficit, and “it wouldn’t be fair to pass it on to future generations,” he will say.

As Prime Minister David Cameron’s Conservatives seek to reap the credit for a strengthening economic recovery, the Liberal Democrats are trying to persuade voters they have made a difference in government in the runup to the next general election in 2015. Deputy Prime Minister Nick Clegg criticized Cameron at the conference three days ago, arguing the Tories are too extreme to be allowed to govern alone.

In a motion approved by party delegates yesterday, Alexander said taxation should focus on wealth rather than income. The conference voted in favor of introducing a system of taxation on land value, taxing capital gains at the same level as income and bringing in a so-called mansion tax for residential properties valued at more than 2 million pounds ($3.2 million).

Demographic Pressures

“The pressures of an ageing and growing population will have to be paid for,” Alexander will say. “As we think about the choices facing us in the next Parliament, the tax policy we agreed yesterday puts us in a strong position. Liberal Democrats will ensure that those who have the most will continue to contribute the most.”

A call to consider reintroducing the top 50 percent income-tax rate, scrapped by Tory Chancellor of the Exchequer George Osborne in March last year, was narrowly defeated by 224 votes to 220 yesterday.

“The only way we can disassociate ourselves from this Tory top-rate tax cut is to commit ourselves to reintroducing it,” Liberal Democrat lawmaker John Leech said during the debate. “At the 2015 election, I don’t want the debate to be about tax cuts for millionaires, I want it to be about our commitment to taking the poorest out of tax altogether.”

Delegates also voted against Tory plans to introduce tax breaks for married couples, backing an amendment that called the proposal “discriminatory, unnecessary and expensive.”

To contact the reporter on this story: Svenja O’Donnell in Glasgow, Scotland, on sodonnell@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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