Lib Dems 'to raise tax allowance'

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Raising the personal income tax allowance to £12,500 will be a key Liberal Democrat demand in any coalition talks after the 2015 election, the senior minister who will lead the party's negotiating team will say today.

Treasury Chief Secretary Danny Alexander will confirm that increasing the threshold will be written into the party's manifesto for the contest, and a rise of at least £500 - giving a tax cut of £100 - would be earmarked for the first Budget or Autumn Statement after the election.