The Liberal Democrat leader, Nick Clegg, has called for national income tax to be cut by 4p to help boost consumer spending and support the economy.
Among a number of policies proposed today, he also called for financial advice to become compulsory at the point repossession claims are issued and says the banking industry is in need of reform.
Clegg says he will extend the Liberal Democrat spending review to find £20bn of Government spending that can be scrapped in order to reduce the tax burden on lower and middle-income families and boost consumer spending.
He says: “There isn’t much scope in fiscal or monetary terms for a stimulus package. But we can restructure our tax system to give tax breaks to low and middle-income families, to support consumer spending.
“Overall, the tax burden should not rise. But it’s also vital that we shift the burden of taxation away from hard work and onto pollution. The Liberal Democrats would cut national income tax by 4p.”
To prevent further growth in home repossession, Clegg says financial advice should be compulsory when repossession claims are issued, and called on banks to offer more shared ownership arrangements to help borrowers that fall into arrears.
He says: “We need to look at banking regulation in the round. The truth is, the British banking industry is cosseted and closed. It is not truly competitive.
“For years it’s been almost impossible to get a new banking licence. New banks are usually just a subsidiary of existing banks.”
He says banks need to be allowed to fail in future, and deposit protection should be ‘beefed up’ to protect consumers with banks making a contribution to the scheme.
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