Nick Clegg admits middle classes will bear tax cost

Nick Clegg conceded for the first time today that Liberal Democrat policy to slash taxes for the poor will see the middle classes pay more.

The Deputy Prime Minister admitted there would be a rise in high-rate taxpayers as a "knock-on" effect of the policy.

But Mr Clegg vowed the Government would take "consistent, clear" steps towards increasing to £10,000 the amount workers can earn before paying tax.

It was a Lib-Dem pledge before the general election as a policy to be brought in gradually. From April the starting rate for income tax will rise by £1,000 to £7,475, lifting 500,000 out of tax altogether but creating 750,000 more high-rate taxpayers to pay for it.

The Institute for Fiscal Studies said raising the threshold would result in 850,000 extra high-rate taxpayers.