Politics Live blog: Nick Clegg's speech on tax cuts

Rolling coverage of all the day's political developments as they happen, including Nick Clegg's speech on tax cuts

11.16am: Clegg says these liberal principles are particularly important today, when all countries need to decide how the burden will be shared.

Every politician now has a simple choice: do you support a tax system that rewards the hard-working many? Or do you back taxes that favour the wealthy few?

I know which side of the line I stand on:

The UK's tax system cannot go on like this. With those at the top claiming the reliefs, enjoying the allowances, hiring other people to find the loopholes, while everyone else pays through the nose.

11.12am: Clegg turns to tax.

My philosophy on tax is simple. The system should reward effort, enterprise and innovation. And bear down on those things which are bad for our society.

For those from the conservative tradition, taxes are necessary, but "there is an understandable fear that tax-done-badly can threaten entrepreneurialism and business," he says.

For the left, taxes are a means of redistribution.

Socialists will support a penal rate of tax on the highest earners. Simply because it makes them poorer.

For them, tax is a badge of socialist success: the more, the better.

They would rather draw money in through the state and then hand it back to people, rather than letting them keep more of their earnings in the first place.

Clegg says the liberal approach is different.

The liberal approach, put most simply, is based on a profound commitment to the value of paid work. Citizens are empowered when they can keep the fruits of their own labour. As Gladstone said, it is better for money to 'fructify in the pockets' of the people who earn it, rather than in the Treasury. And fiscal liberalism supports taxes on unearned wealth precisely to lighten taxes on the wages of the hardworking.

11.09am: On benefits, Clegg says those who cannot work must be protected.

That is precisely why, in the Autumn Statement last year the coalition committed to the full uprating for pensions and out-of-work benefits from April - 5.2%, in line with inflation.

Not everyone agreed that "the unemployed" should receive the full uplift, certainly not in the current climate. And, if you believed everything you read, you would think that these benefits are, essentially, unlimited handouts for the 'idle poor'.

But that just shows what is so often wrong with this debate.

For one thing, for decades now benefits have been uprated in line with prices, while earnings have generally increased at a faster rate.

Clegg says only a "minority" abuse the benefit system. And many people get off benefits quickly, he says. "The majority of people who claim JSA are off benefits within three months."

11.07am: The economy needs to be rebalanced, he says. And that includes a rebalancing of the tax and benefit systems.

Both need to be rebuilt with work at their heart, restoring some sense to the assistance and rewards the state provides.

11.05am: Clegg starts by saying that yesterday's GDP figures show the recovery will be "uneven".

The UK's economic weakness was "a damning indictment of the way our economy had been run", he says.

An economy that became closed, elitist, driven by vested interests, where we prized recklessness and short-term gains, and undervalued stability and hardwork.

11.01am: Nick Clegg is about to give his speech on tax cuts - or "supporting working families", as the Cabinet are calling it.

He's speaking at the Resolution Foundation, a thinktank specialising in the plight of low and middle-income families.

10.48am: You can read all today's Guardian politics stories here. And all the politics stories filed yesterday, including some in today's paper, are here.

As for the rest of the papers, here are three articles that are particularly interesting.

? Andrew Grice in the Independent says George Osborne is considering bringing forward tax cuts in line with the proposals being made by Nick Clegg today.

George Osborne is considering tax cuts for low and middle earners in his March Budget in an attempt to kick-start growth after figures showed that the economy is contracting.

The Chancellor will consider speeding up the Coalition's plan to raise the personal tax allowance to £10,000 a year by 2015. The move would help families in the "squeezed middle" and enable them to spend more ? in the hope this would get the economy moving again.

Significantly, the Treasury has cleared a speech by Nick Clegg today in which he will urge Mr Osborne to go "further and faster" towards the £10,000 tax-free income goal. This was a key Liberal Democrat pledge at the 2010 election and is Mr Clegg's No 1 priority in negotiations with Mr Osborne about the Budget, which have just begun.

? Sue Cameron in the Daily Telegraph says the universal credit project is in trouble.

All is not well ? far from it, according to insiders. One senior figure says: "The idea that universal credit will be ready to roll in 2013 is pie in the sky. It just won't be possible to meet the deadlines. Civil servants don't like saying 'No, minister' and the result is that everything has been overpromised."

It doesn't help that DWP officials will not be given information from the pilot and, unsurprisingly, they are not happy. Perhaps old habits of confidentiality at HMRC die hard. Officials there are bound by law ? and the threat of imprisonment ? not to reveal anyone's tax details. They've not even been allowed to tell other government departments ? with a few rare exceptions, such as helping the police, but then only in cases of murder and terrorism.

Now I discover that the Coalition has sneaked through changes in the law that will allow workers in benefit offices everywhere to access everyone's tax details. Maybe this is necessary, but shouldn't ministers who pretend to believe in shrinking the state have told us instead of doing it by stealth? Benefit officials will risk jail if they leak any taxpayers' details, but there's no doubt that security will be far weaker.

? David Robertson and Sam Coates in the Times says that Lord Mandelson in his IPPR report (see 9.36am) has admitted that Labour "oversold" the benefits of globalisation.

He argues that Labour seized on globalisation in the early Nineties as a response to the decline of manufacturing and a "general understanding that the world was changing".

He adds: "Looking back, we can see that this approach did neither us, nor globalisation itself, any favours. It was intellectually abstract and inflexible ... It oversold globalisation and, ultimately, made it harder to make a pragmatic case for openness. It is not enough to pretend that globalisation is simply irreversible."

10.32am: David Cameron will soon be delivering his speech in Davos. I'll be taking a look at it, but, for full coverage, you need to go to my colleague David Shariatmadari's Davos live blog.

10.18am: Liverpool is going to get its own mayor, the Liverpool Post is revealing this morning. The government was already committed to giving Liverpool and 10 other cities a vote on whether or not they should have a mayor. But in Liverpool that referendum has now effectively been bypassed and voters in the city will elect a mayor in May.

Several of the cities due to hold votes on whether to move to a mayoral system (in November) are expected to vote no and a colleague points out that this could be quite a clever way of encouraging them to vote yes. If Liverpool is getting a mayor, Sheffield should have one too, the argument might go. David Cameron wants as many cities to vote yes as possible because he believes having elected mayors will help urban regeneration.

10.13am: Danny Alexander, the chief secretary to the Treasury, told BBC Radio Scotland this morning that he did not see why Scotland would have to wait "a thousand days" before being allowed to vote on independence.

I still think there's a question people will want to consider when they respond to these consultations about why it is we have to wait a thousand more days before we can get on and have this question asked. I remember back in 2009 when the SNP Government last set out plans for a referendum, they said they were going to call it in 2010. So back then they thought they could get the job done in a year.

9.36am: For students of New Labour, Lord Mandelson's interview on the Today programme this morning was a treat. For a start, he disowned what is seen by many as the defining quote of the New Labour era, his own assertion that he was "intensely relaxed about people getting filthy rich". In other respects, he sounded very New Labour, attacking banker bashing and hinting (at least, to my ears) that he's more in the George Osborne camp than the Ed Balls camp on the subject of deficit reduction. And his comments on Ed Miliband were fascinating too - not just because (as Guido Fawkes has gleefully pointed out) he was disintinctly lukewarm, but because his analysis of Miliband's predicament was rather a good one.

Here are the main points.

? Mandelson declared that he was no longer "intensely relaxed about people getting filthy rich". He was more concerned about inequality than he was in the past, he said. Asked about his "filthy rich" remark, he said it was "a rather spontaneous, unthought-off remark" made in in 1998 response to a senior America industrialist who was worried about investing in the UK because he thought the new Labour government would introduce socialism. This is what he said when he was asked if he would use the phrase now.

I don't think I would say that now. Why? Because, amongst other things, we've seen that globalisation has not generated the rising incomes for all, the benefits from globalisation that should have come from rising prosperity and living standards that we took for granted and which we assumed globalisation would drive ... Globalisation is also generating income inequalities within countries and between countries that we simply can't and shouldn't live with.

? He gave an equivocal endorsement of Ed Miliband, saying that the Labour leader was "doing well in the circumstances" but "struggling" with the need to defend Labour's record, oppose the government and remodel centre-left politics for the 21st century all at the same time.

What I think that Ed Miliband is doing - he's struggling with two things and they are not easy. One is that he's trying to oppose the government on the economy where, legitimately or not - people will take different views - they think the government is in the wrong place. But in making an argument against what the government is doing in fighting the recession, he's also struggling with his own inherited legacy from the previous Labour government, and they are not doing that easily or finely, but nor it is simple to do.

At exactly the same time, he's struggling to invent a new left-of-centre political paradigm that isn't New Labour, that in a sense takes lessons and experience from the last 15 years, not least from the experience of globalisation, revisits the issues to do with markets and inequalities and responsible capitalism, to invent a new left-of-centre politics for the 21st century. Now he's trying to do these things simultaneously, neither of them are simple or straightforward, at a time when not very many people are giving him the benefit of the doubt. It's a rather unenviable job, which I think he's doing well in the circumstances. But it's not easy.

As the Telegraph's James Kirkup points out on Twitter, it is hard to believe that an old pro like Mandelson used the word "struggling" about Miliband three times without knowing what impression would create.

The line about the economy - "where, legitimately or not - people will take different views - they [Labour] think the government is in the wrong place" - was also intriguing. To my ears, that was Mandelson hinting that he himself takes a "different view" and that he does not agree with his party about the need for slower deficit reduction.

? He said the right had been winning the argument on deficit reduction.

I think in the main, what's happened [in politics globally] is that the right wing have been better at handling the rhetoric of austerity and cutting back and deficit reduction, which broadly speaking I have to say is where the public have been. I'm not sure they're going to remain in that place, but, you know, there's been a marrying-up of right-wing rhetoric and what the public feel is necessary.

? He said the left should avoid banker bashing.

The centre left have got to fight back, but not by reverting to old arguments about state control and intervention, and not in my view by employing too much of the new rhetoric on the left of business and bank bashing. I don't think that's going to get them anywhere at all.

? He endorsed the industrial policies being pursued by the Department for Business under Vince Cable and David Willetts.

After a shaky start, BIS [the Department for Business] has got into its stride. If you see what Vince Cable is doing, and what David Willetts in particular is doing - I read a speech of his only the other day, I could have written every word of it myself - it is in a sense taking to a higher and more sophisticated level the sort of industrial policy thinking and actions that I was introducing when I came back to government.

Mandelson was on the Today programme because he has contributed to a report globalisation being published by the IPPR today. You can read the 108-page report here (pdf).

There is also an audioBOO of the Today interview.

9.08am: At ConservativeHome Tim Montgomerie is saying that he hopes Conservatives will not criticise Nick Clegg for demanding tax cuts for middle-income earners, funded by tax increases for the rich.

It is regrettable that the Tory leadership has allowed Nick Clegg to make the running on this issue. The Conservative brand remains fundamentally weak. At the last four elections we've scored just 30.7%, 31.7%, 32.4% and 36.1%. One of the key reasons is that we are not seen as a one nation party. Half of Britons tell YouGov that the Tories only appeal to one section of Britain. That compares to just 19% and 11% who think the same of Labour and the Lib Dems. George Osborne should be leading the way in creating a system that taxes jobs less and wealth more while leaving the overall burden of tax unchanged. This is a principle theme of ConHome's Majority Conservatism. If Conservatives do not rebalance the tax system in a sensitive way then more radical parties will do so in a way that's less helpful to the free market. My fear is that the usual Tory MPs will fill the airwaves today to attack Nick Clegg and reinforce the Tory toff problem.

Montgomerie has been pleased to see that three Tory MPs have already used Twitter to back his argument. Zac Goldsmith and Gavin Barwell have posted tweets saying they agree with Montgomerie's point about the need for the Conservative party not to attack Clegg. And Justin Tomlinson has posted this.

@TimMontgomerie Absolutely, it is the best way 2 get money back into the pockets of those doing the right thing & working, has 2 be priority

8.50am: The news fountain is in full flow this morning. David Cameron is giving a speech in Davos. Nick Clegg is giving his own speech, which I will be focusing on in detail, effectively opening up the coalition budget negotiations to public scrutiny with an explicit demand for tax cuts for middle-income Britain. And Lord Mandelson has been on the Today programme. As usual, it made for cracking copy. As well as giving a decidely equivocal assessment of Ed Miliband and saying that he agreed with every word of a recent speech given by David Willetts (an endorsement which is not likely to endear Willetts to his Tory colleagues, Mandelson also said that he would not now say that he was "intensely relaxed about people getting filthy rich". Given that (rightly or wrong) this remark came to be perceived as a key New Labour credo, this is quite a capitulation. I'll post a full summary of the interview soon.

Here's the agenda for the whole day.

9am: Nick Herbert, the policing minister, gives a speech. As Alan Travis reports, he will announce plans for a national police air service.

9.30am: The Department for Education publishes secondary school league tables.

10am: John Lyon, the parliamentary commissioner for standards, gives evidence to the Commons political and constitutional reform committee.

10am: Senior executives from Google and Facebook give evidence to the Leveson Inquiry. Other witnesses include Christopher Graham, the information commissioner, and Popbitch founder Camilla Wright.

10.30am: David Cameron delivers a speech at Davos. He is going to urge EU leaders to be bolder in their approach to the eurozone crisis, saying "tinkering won't cut it any more". David Shariatmadari will be covering this on his Davos live blog.

11am: Nick Clegg gives a speech to the Resolution Foundation. As Patrick Wintour reports in today's Guardian, he is going to call for tax cuts for middle-income Britain in what amounts to public budget submission to the chancellor, George Osborne.

At some point today Caroline Spelman, the environment secretary, is also publishing the first ever national assessment of the risks from climate change. As Juliette Jowit reports, it will say that flooding is the greatest risk, with up to 3.6 million people at risk by the middle of the century.

As usual, I'll be covering all the breaking political news, as well as looking at the papers and bringing you the best politics from the web. I'll post a lunchtime summary at around 1pm and another in the afternoon.

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