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Clegg backs green economy boost Lib Dems 'providing hope' - Clegg
(about 10 hours later)
The Liberal Democrats would scrap the 2.5% cut in VAT and spend the £12.5bn it is costing on green measures to boost the economy, Nick Clegg will say. The Lib Dems are offering a "sense of hope and direction" for people suffering in the current economic climate, Nick Clegg has said.
Mr Clegg says the government's plan is to "tinker" with VAT when what is needed is "fresh, bold thinking". On the first anniversary of his election as leader, Mr Clegg said his party had taken the lead on the economy and other key issues affecting the UK.
The Lib Dems would instead insulate schools and hospitals, subsidise energy efficiency and upgrade rail lines. He is outlining plans to scrap Labour's 2.5% cut in VAT and spend the £12.5bn it will cost on green measures.
On Wednesday a Lib Dem move to annul the temporary cut was defeated in the Commons by 303 votes to 223. Creating "sustainable" jobs was vital to future economic growth, he added.
Home energy Year in charge
Mr Clegg will launch his proposals on Thursday, the first anniversary of his election as party leader. As he marks a year in the job, Mr Clegg is setting out his vision for dealing with the downturn and preparing the UK for future recovery.
He is visiting Derby, whose Bombardier train company could benefit from the construction of 700 new carriages proposed by the party. Gordon Brown and David Cameron are like two dogs fighting over the wrong bone Nick Clegg class="" href="http://www.bbc.co.uk/blogs/nickrobinson/2008/12/shovel_ready_sc.html">Nick Robinson on the Lib Dem proposals
He told the BBC that his party was focused on practical help for people most at need rather than squabbling over questions such as how much the government should borrow to support the economy.
"Gordon Brown and David Cameron are like two dogs fighting over the wrong bone," he said.
The Lib Dem proposals would include a five-year plan to insulate every school and hospital, subsidies for home energy efficiency, 40,000 new zero-carbon homes, improvements to rail lines and 700 new train carriages.The Lib Dem proposals would include a five-year plan to insulate every school and hospital, subsidies for home energy efficiency, 40,000 new zero-carbon homes, improvements to rail lines and 700 new train carriages.
Instead of a meaningless VAT cut that people won't notice, we will insulate every school and hospital in the country Nick Clegg Mr Clegg accused the government of "tinkering" with ineffectual measures such as the VAT cut when what was needed was "fresh, bold thinking".
Mr Clegg will say people are losing their jobs, struggling with bills and being "plunged into fuel poverty". On Wednesday a Lib Dem move to annul the temporary cut was defeated in the Commons by 303 votes to 223.
"The government's answer is to borrow £12.5 billion to tinker with VAT when what is really needed is fresh, bold thinking," he will say. Lib Dem policies sent a "message of hope and fair values which I believe are very attractive to many people in the country," he said.
"Instead of a meaningless VAT cut that people won't notice, we will insulate every school and hospital in the country and the homes of a million people languishing in fuel poverty. The Lib Dems were the first party to "identify" the risk of a recession and campaign against "astronomical" rises in energy bills.
Mr Clegg added: "Instead of a meaningless VAT cut that people won't notice, we will insulate every school and hospital in the country and the homes of a million people languishing in fuel poverty.
"We will build thousands of desperately needed social houses, install money-saving smart meters, re-open rail lines and build new trains.""We will build thousands of desperately needed social houses, install money-saving smart meters, re-open rail lines and build new trains."
The temporary VAT cut, from 17.5% to 15%, came into force on 1 December but will revert to 17.5% at the end of 2009. 'Leading the way'
In a Commons debate on Wednesday, the Liberal Democrat Treasury spokesman Vince Cable described it as a "seriously defective" way of getting money into the economy. Mr Clegg defended his performance over the last year, saying the party had led the way on the major issues affecting the British people such as Iraq and the defence of civil liberties.
The Conservatives have also criticised the cut, saying it is "unaffordable and ineffective" and would lead to a massive increase in taxation. He added that he was "proud" of the party's performance in May's local elections.
And two German politicians have also broken with diplomatic convention and criticised the UK's response to the economic downturn. The Lib Dems back government plans to inject money into the economy to support jobs but argue the VAT cut - which came into force on 1 December - is the wrong solution.
But defending the policy in the Commons, Treasury Minister Stephen Timms said it was a fair way to put money into the economy because low income households spent a larger share of their income on VAT than richer households. In a Commons debate on Wednesday, the Liberal Democrat Treasury spokesman Vince Cable described it as "seriously defective".
He also said tax cuts would not help those who do not pay income tax, such as pensioners. The Conservatives also criticised the cut, saying it is "unaffordable and ineffective" and would lead to a massive increase in taxation.
But Treasury Minister Stephen Timms said it was a fair way to put money into the economy because low income households spent a larger share of their income on VAT than richer households.
Labour has accused the Lib Dems of wanting to cut public spending at a time when investment in public services should be maintained.