The government is being forced to reconsider its renovation package by the Liberal Alliance

The Liberal Alliance party (LA) is making life difficult for the Liberal-Conservative government, using what little power it has to block a green renovation package unless more tax cuts are implemented.

Anders Samuelsen, LA’s leader and one of the only two remaining MPs, has indicated that the party is not ready to back the government’s plan to create a 1.5 billion kroner subsidy fund to help with climate-friendly housing renovation costs. Samuelsen said that what the country needed first was further tax cuts to stimulate the economy during the financial crisis.

Liberal Alliance is required to be part of the negotiations due to its participation in the previous budget agreement.

But although the government has made several bargaining offers to LA- including cutting housing registration costs in half - Samuelsen is prepared to stand firm on his tax demands.

‘What we need right now is to expedite some serious tax cuts and that’s what we require for any deal,’ he said. ‘We are not going to let ourselves be bribed. Apparently the government has a hard time understanding that.’

LA has also demanded that the annual 5000 kroner multimedia tax – payable on media equipment used by work-from-home employees - be done away with. In addition, the party wants fees for yellow commercial licence plates lowered and taxes on instalment pension plans dropped.

Lars Løkke Rasmussen, the finance minister, fired back at Samuelsen, saying that if LA sticks to its guns the government may be forced to find another solution.

But the only real alternative the government could turn to is breaking the budget agreement, which also includes the Danish People’s Party. Otherwise one of the sides will have to give in or the package will have to be scrapped altogether.

According to the proposed renovation package, loan subsidies would cover up to 40 percent of material costs at a maximum of 15,000 kroner per household, while building material costs would be covered at 20 percent, with a maximum subsidy of 10,000 kroner.