We will be the party of tax cuts, says Clegg

The Liberal Democrats have laid out plans to lower the standard income tax rate from 20p to 16p

Nick Clegg will today commit the Liberal Democrats to cutting the overall tax burden as he relaunches his party as one committed to fairness for people on low and middle incomes.

He will attempt to undercut Labour and the Conservatives by pledging to slash Whitehall spending to pay for tax reductions, and will reaffirm his commitment to lowering the standard rate of income tax to 16p in the pound. The Liberal Democrat leader will say: "We will get wasteful government spending under control and give the economy a boost by cutting taxes from the bottom for those who need the most help. If there is money to spare, we won't simply spend it. We are looking for ways to cut the overall tax burden."

Mr Clegg will try to cut through the increasingly dominant battle between Labour and the Tories by launching a statement of values designed to outline the big ideas he believes will help double the number of Liberal Democrat MPs within two general elections. He will argue that his party can deliver in a way the main parties cannot, saying: "If you want Britain to be fairer, you know who will make it happen – we will. Labour can't, the Tories won't."

His ideas include giving people a say on how offenders pay for their crimes, and offering a guarantee that patients will be able to get state backing for private health care if the NHS fails to treat them on time.

The Liberal Democrats have laid out plans to lower the standard income tax rate from 20p to 16p, paid for through a combination of "green taxes" and closing loopholes in the system for wealth taxation. Mr Clegg will make it clear the party's hope is to go further and cut the overall tax burden. His policy document says: "When I promise to make Britain fairer, we are talking about big tax cuts for those who are struggling, an end to the unfair council tax and extra investment in the poorest children from their first day at pre school right through to university."

Mr Clegg has told his Treasury spokesman, Jeremy Browne, to find £20bn of cost savings in the Whitehall budget. Plans could include scrapping the Department for Business, Enterprise and Regulatory Reform and moving parts of the Civil Service to cheaper locations outside London.

Proposals to cut the number of MPs by a third are intended to be a strong signal that the Liberal Democrats favour a dramatic slimming down of state apparatus. Mr Clegg and his high command hope that the new policy document, Vision And Values, will set out a distinctive new direction for the party, which has been squeezed by the rise of David Cameron as a political force and the collapse of Labour support under Gordon Brown.

The document will offer Mr Clegg a springboard for his party conference in September. He hopes the statement of aims and values will focus the efforts of grassroots activists, as well as giving voters a clearer vision of what the party stands for.

The Liberal Democrats have been frustrated by their failure to break through in recent polls, although the party did gain control of four local authorities in the May elections and pushed Labour into third place.

An Independent poll of polls shows the party's support has remained at 18 per cent for most of the year, but Mr Clegg's personal approval rating has improved.

From left to right

Charles Kennedy

Broke decisively with Labour, leading opposition to the invasion of Iraq within Parliament at a time when the Labour and Conservative leadership both backed war.

Paddy Ashdown

Proclaimed "equidistance" between Labour and Tories but nudged closer to Labour in the 1990s, even secretly preparingfor coalition before 1997 election.

Sir Menzies Campbell

A personal friend of Gordon Brown, Sir Menzies was always a figure of the liberal right. Dropped the totemic proposal for a 50 pence top rate of tax.

Nick Clegg

His aspiration to cut the tax burden moves the party firmly to the right of Labour. Has dealt closely with the Tories over civil liberties and toughened criminal justice policy.