Lib Dems: Tax wealth to create £100bn ‘citizen’s fund’

A £100bn “citizens fund” should be created to spread the UK’s wealth more evenly, the Liberal Democrat leader Sir Vince Cable is proposing.

He will tell the party’s conference it could be built up through taxes on the richest and the sale of assets, such as the UK stake in Royal Bank of Scotland.

Sir Vince will say it is a “disgrace” taxpayers are yet to be repaid for the RBS bail-out in the financial crisis.

A sovereign wealth fund would bolster public finances, he will add.

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Former Business Secretary Sir Vince will also suggest the introduction of a 25% flat rate of tax relief on pensions to encourage the less well-off to save.

The proposed wealth taxes include setting capital gains and income tax at the same levels.

In the months before the financial crisis in 2008 Sir Vince Cable repeatedly warned the then Labour government about high levels of household debt.

A wealth fund would, he hopes, allow the UK to benefit from returns on investments typically only available to the wealthy and protect the UK from future economic crises.

Speaking to the Press Association ahead of his speech, Sir Vince said: “One of the features of modern society which is pretty unhealthy is that we have a growing concentration of wealth, a growing sense of inequality.

“It is the accumulation of assets which is primarily the issue.

“We will look at some of the ways you can effectively tax assets and use the proceeds, not to spend on current spending, some of it might go to urgent needs, but, actually, you invest it in the future.”

‘Supporting Vince’

Delegates at the Liberal Democrat conference in Brighton will debate wealth taxes on Tuesday.

BBC political correspondent Jonathan Blake says the policy will be an easy sell to members but it will need to find wider support if the party are to re-emerge from the margins of British politics.

The Lib Dems have struggled electorally since 2010, when they formed a coalition government with the Conservatives. The party has 12 MPs – down from the 57 they had in 2010.

Sir Vince has advocated a change to the party’s rules, so that someone who is not an MP could become leader, and “liberal-minded” people could sign up to the Lib Dems for free and get the right to vote for the leadership.

Lib Dem MP Ed Davey told the BBC he backed Sir Vince’s proposed reforms, saying a shake-up of the party would allow it to go “from strength to strength”.

Mr Davey said the party was united behind Sir Vince, who has announced he will stand down before the next general election due in 2022.

Asked if he would stand for leader, former Energy Secretary Mr Davey did not rule himself out, saying: “I’m not thinking about it at the moment, I’m thinking about supporting Vince.”

Lib Dem deputy leader Jo Swinson said they had the “ingredients to be able to challenge the other parties”.

She told Sky News’s Sophy Ridge On Sunday: “The whole idea of a centrist party gets talked about endlessly but doesn’t really get off the ground.

“You don’t need to set up a new party because the Liberal Democrats are here, but we recognise that we have to change.”