Clegg calls for £1bn tax giveaway


Nick Clegg

Deputy Prime Minister Nick Clegg is pressing his Tory coalition partners to take advantage of the improving economy for a £1 billion tax giveaway before the next general election.

The Liberal Democrat leader wants Chancellor George Osborne to raise the threshold at which people start paying income tax to at least £10,500 by the time of the election in May 2015, aides have said.

The cut would be worth £100 a year to 24 million ordinary rate taxpayers while taking around half a million people out of income tax altogether.

The Lib Dems have already seen the coalition achieve their manifesto commitment to raise the personal allowance to £10,000 - which was finally reached in the last Budget in March.
Mr Clegg is now keen to be able to claim the political credit for a further advance in what he regards as his "signature tune" policy.

He will write to party activists next week declaring his intention to fight for a "workers' bonus" to reward voters for the sacrifices they have made during the years of austerity.

The move - details of which emerged as David Cameron was on his way back to the UK after attending the Commonwealth summit in Sri Lanka - is likely to infuriate the Tories, who believe they should take just as much credit.

Lib Dems however pointed out that in the televised debates before the last general election, Mr Cameron argued that raising the personal allowance to £10,000 would not be possible.

A source close to Mr Clegg said: "Our polling shows that raising the tax allowance is both strongly associated with the Lib Dems and popular. We know that we are on to a vote winner here.

"The Tories once said this policy wasn't affordable but now they like to claim credit for it. Will they now join the Lib Dems in going further and faster?"

For Labour, shadow treasury chief secretary Chris Leslie dismissed the call, saying the coalition's changes had left working families worse off overall.

"Working people facing a cost-of-living crisis need help right now, but Nick Clegg's Government has instead prioritised a huge tax cut for those earning over £150,000," he said.

"When it comes to people on middle and low incomes, the Government is giving with one hand but taking away much more with the other.

"The Lib Dems need to explain how their proposal would be paid for and why they refuse to back Labour's plan to freeze energy bills and reform the market."

© 2013 Press Association