Clegg renews tax cut call

Nick Clegg has called on the prime minister to cut taxes to help low and middle income families cope with the effects of the financial crisis.

The Liberal Democrat leader said the government should raise money for tax cuts by ending billions of pounds worth of tax loopholes that benefit the wealthy.

At their autumn conference last month, the Lib Dems backed plans that would see the party fight the next election on a policy of cutting taxes for those on lower incomes.

The plan aims to save £20bn per year in public spending by cutting government waste and scrapping  programmes such as identity cards.

Speaking during prime minister's questions on Wednesday, Clegg said the move "wouldn't require extra government borrowing, it is fair and it would be good for the economy".

"Why won't the prime minister give people on ordinary incomes some of their money back?" he said.

Brown replied that the government had been closing tax loopholes with every Budget since 1997.

Pointing to additional money in the economy to give 22 million people a tax cut of £120, he said that the winter allowance had been increased to £250 for the over 60s and £400 for the over 80s.

"We're helping low income families with their fuel bills, but he cannot wish away the policy he announced at his conference to cut public spending by £20bn," Brown said.

Clegg in turn accused the prime minister of being unable to tell the difference between redistributing taxes and cutting them.