Sam Coates, Chief Political Correspondent
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Nick Clegg has suffered a serious setback as he approaches his first anniversary as the Liberal Democrats’ leader after the party’s biggest donor quit because he is unhappy about its tax policies, The Times can reveal.
Lord Jacobs, 77, a member of the party since 1972 and a Liberal Democrat peer since 1997, told Mr Clegg he was leaving the party because he believed that its tax policies were too timid. He also suggested that Mr Clegg was not doing enough to keep up his media profile and doubted the party’s chances at the next election. The party’s former treasurer and strategist, who is worth an estimated £128 million from his involvement in the British School of Motoring, will become an independent crossbencher.
The resignation could not have come at a worse time for the party as it waits to hear whether it must forfeit the £2.4 million donation from Michael Brown, who was convicted last month of theft and fraud. Lord Jacobs said that Mr Clegg and Vince Cable, the party’s Treasury spokesman, “feel society wants the rich to pay more, whereas I’m arguing the rich could pay less provided the poorest pay nothing or very little indeed”.
He said he could not support policies that left those on minimum wage paying so much combined income tax and employee national insurance.
Lord Jacobs is believed to have given the party up to £1 million over the past two decades. A Liberal Democrat spokesman said last night: “It is important that no member of the party, whether they are a donor or not, can simply dictate the party’s policies.
“Nick made clear to Lord Jacobs that he agreed that the tax burden on ordinary taxpayers should be lowered, as the party has been advocating for months, but that Lord Jacobs’s wider proposals do not stand up to economic or political scrutiny.
“Nick Clegg and Vince Cable will not change their principles in response to threats of resignations from donors on anyone else.”

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The chickens are coming home for calamity Clegg. Lib Dems represent no choice at all with their support of an EU superstate, their disgraceful blocking of a referendum and their public service cuts. Radical liberals will look to the Liberal Party for real liberal ideas. www.liberal.org.uk
Tim Perkins, Manchester, UK
I despise the Lib-Dems - their disgraceful conduct on the libson treaty referendum is unforgivable.
However, if Clegg had changed LibDem policy just to retain a single donor then my oppinion would (somehow) have sunk even lower.
paul, brighton,
£1 million over twenty years? That's less than £1K a week.
Surely he can't be their biggest donor?
richard, birmingham, UK
LibDems the party that wants to scrap high income tax relief on pension contributions. Just about the only way of securing a half decent pension in the UK and they want to get rid of it. Losers, middle england will never vote for this madness.
nigel, swindon, uk
Fundamentally all UK tax rates are a disgrace. Personal allowances should be doubled. 10% reinstated, the higher rate threshold lifted to £75K. People are disgusted with the waste, profligacy and theft of this utterly useless government. Hard working people have been disenfranchised and betrayed.
Vic, London, UK.
The LibDems are not and never will be a genuine political alternative or a force of any real power in Britain. The only choices in the real world are Labour or Conservative. All LibDem donors must know in their heart of hearts that they are simply throwing their money away.
Matthew, London, UK
Clegg is well rid of this fat cat donor. The rich should be taxed much more not less. What's more, wealth taxes are needed, not just a rise in income tax.
perry smithwick, market harborough, u.k.
The only progressive party on taxation and other issues is UKIP. This is the only party that would change the relationship aka assumptions we have on tax. Furthermore UKIP would lift many poorer people out of paying tax. The three main parties are moribund, supporting the mega rich and autocracy.
Roshan, Perth, Australia
As a Lib Dem supporter I am very disappointed in the Lib Dems who have never been the same since Paddy Ashdown quit as leader. The Lib Dems are too quiet and their policies are a mess. If it was not for personal loyalty to Bob Russell MP in Colchester I would have ceased supporting the Lib Dems.
Alex Jones, Colchester, UK
Clegg might wish to be considered as the next Speaker.
Crowther, Silsden, UK
More dosh coming Camerons way then ? let's hope so. We've got to hope that the Lib Dems can see that Brown has got to be halted in his tracks at turning the UK into 4th world economy and a stalinist state. WE need change of direction and fresh faces. The sooner Brown goes the better.
Michael, London, England
Thats the first time I have heard that anyone has grasped the absolute unfairness of 20 tax plus 11% NI costing the lower paid 31% of a large bulk of their income, yet rich people on £1-500k to £2m+ pay the vast bulk of their income at 40-41% because NI has a cap on it.
Total disgrace as he said
Steve, West Wickham, U
Which policies are a disgrace?
What policies?
Robert, Hull, UK
More dosh coming Cameron.s way then , I guess. Shame
Keith Price, Luton, UK