Nick Clegg David Cameron
Prime Minister David Cameron and Deputy Prime Minister Nick CleggReuters

Further evidence that the 2015 election campaign is becoming a time-honoured battle over taxation has emerged with reports that the Liberal Democrats are planning a "tax the rich" manifesto.

In a move that sees the party moving even further onto Labour territory, it has been revealed that Treasury secretary Danny Alexander is drawing up proposals for a new mansion tax and a £1m lifetime cap on the amount individuals can put, tax free, into their pension savings.

It is estimated the policies would raise around £2bn each a year but, as Labour continue to drive a "fair tax" agenda, the Lib Dems are also highlighting the fairness of their proposals over and above their tax-raising benefits.

The manifesto plans, revealed by the Independent newspaper, are part of the party's ongoing campaign to differentiate itself from the Tories in the run up to the general election.

If, as expected, the proposals were "red line" demands in any post-election coalition negotiations it would further boost the chances of a deal with Labour if the electoral arithmetic made it possible.

According to the report, the Treasury had already drawn up detailed and costed plans to introduce a banded mansion tax on properties worth more than £2m and £5m before the 2012 budget, but they were vetoed at the last minute by David Cameron, as suspected at the time.

Similarly, the party will promise to reduce the total amount an individual can put into a pension pot without attracting tax, from £1.25m to £1m.

"This is about showing that we have fully costed plans to reduce the deficit by a more equitable distribution between spending cuts and tax rises," a source said.

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The reports came on the same day the government received more good news on the economy, with latest figures showing growth of 0.7% in the last quarter of 2013, the fastest since 2007, and many economists expecting it to be revised upwards.

Meanwhile, latest polling suggested that, while voters supported Labour's 50% top tax rate, they still trusted the government more on keeping the economy on track.

The prime minister welcomed the news as further evidence the government's "long-term economic plan" was working. But, tellingly, deputy prime minister Nick Clegg, while echoing the welcome and claiming credit for it, added the job needed to be finished "fairly" with tax cuts for working people.

His business secretary, Vince Cable, has voiced the same sentiment, saying during a speech this week: "There are different ways of finishing the job. Not all require the pace and scale of cuts set out by the chancellor. And they could allow public spending to stabilise or grow in the next parliament, whilst still getting the debt burden down."

Gradually, the shape of the likely Liberal Democrat manifesto is taking shape with the emphasis on tax increases for the wealthy matched by cuts. This means raising tax thresholds for the lower paid combined with a different level and pace of spending cuts.

There must, however, be a danger that the Lib Dems will differentiate themselves so much from the Tories during the election campaign that another post-election coalition will be impossible.

There is already a growing feeling that the Tories would rather attempt to rule as a minority government than do a second deal with the Lib Dems, despite Cameron's clear preference to dealing with the Lib Dems than his own right-wingers.

Labour, meanwhile, has been making increasingly friendly gestures towards Clegg's party of late. It is also likely that Labour will look carefully at any Lib Dem proposals for policies which might fit well into its own election manifesto.

What remains absolutely certain is that the Tory party will continue to bank on the economic recovery and voters' belief that it's the party most likely to secure their future.

Economic security is expected to be the party's core message in the campaign with the stress on the fact that only a stable recovery will secure the long term future for working people.

However they are aware of the dangers of constantly being portrayed as standing up for the rich and powerful. So expect the budget in March to offer help for the lower paid and continuing talk of raising the minimum wage for a start.