Tag Archives: tax cuts (Lib Dem)

LibLink: Giles Wilkes – Tax cuts are exactly what we don’t need

In the Financial Times today, Lib Dem blogger (turned FT leader writer) Giles Wilkes – former special adviser to Vince Cable and chief economist at liberal think-tank CentreForum – lays into the party’s flagship manifesto commitment to raise the personal allowance:

Giving hundreds of pounds to millions of people is rather popular. Since this is what raising the income tax threshold implies, it is no shock that both the Conservative and Liberal Democrat parties want it in their manifestos. Sadly it is an idea that gets worse with each passing year.

A commitment to “take people out of tax” first emerged in 2008 at a Lib Dem conference. Strategically it was an astute move, threading between the Conservatives’ preference for inheritance tax cuts and Labour’s obsession with doing everything through welfare. It showed Nick Clegg, Lib Dem leader, wrestling his spending-obsessed party towards a more economically liberal philosophy.

Posted in LibLink | Also tagged | 16 Comments

Cameron’s conference: Giveaway budgets are dead! Long live giveaway speeches!

David CameronPoliticians don’t do giveaway budgets any more. It seems just too blatant to ‘bribe’ voters a matter of weeks before an election. Instead politicians now do giveaway leaders’ speeches.

Nick Clegg pulled a policy rabbit out of the hat last year by finding a spare £500m a year for free school meals for infants.

And yesterday David Cameron pulled two policy rabbits out of his top hat by announcing tax-cuts for basic-rate taxpayers (extending the personal allowance to £12,500) and higher-rate taxpayers (raising the threshold at which it becomes payable to £50,000) over the course of the next parliament.

This Tory pledge to extend the personal allowance — we really can’t call it a tax-cut for low-earners any more: most of those who benefit come from better-off households — provoked lots of outrage from Lib Dems.

Some pointed out that this was our idea. Forgive me if I excuse myself from joining the chorus of “But we thought of it first!” Others pointed out that it was an unfunded promise. True, but so’s ours.

Posted in Op-eds | Also tagged and | 18 Comments

Lib Dems pledge more tax cuts: after personal allowance raised to £12.5k will also increase National Insurance threshold

Danny Alexander by Paul WalterToday’s big announcement from the Lib Dems has been the “plan to cut your tax bill further”. Here’s how The Guardian reports it:

The Liberal Democrats are to burnish their credentials as the tax-cutting party for the low paid by floating the possibility of cutting national insurance contributions for anyone earning below £12,500 a year.

In a challenge to David Cameron, who is facing pressure from Tory MPs to pledge bold tax cuts as the economy grows, the Lib Dems will promise in their general election manifesto to raise the level at which workers start to pay national insurance contributions.

Posted in News | Also tagged , , and | 36 Comments

Lib Dems need to take every opportunity to get our message out there

Megaphone, some rights reserved by garrykinghtI’ve made no secret of my view that a change in leadership is likely to do little to revive Liberal Democrat fortunes at the polls given the rather more structural reasons for the decline in support for the party.

But I also recognise that to continue doing and saying the same things over and over again and expecting a different result is not only the definition of insanity but is unlikely to lead to an electoral revival:

We should not simply keep calm and carry on, but nor should we lose our heads either. The long-term success of the party is best served by

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CCHQ seem to be misremembering again – let’s help them out

Generous-hearted souls that we are here at LDV Towers, we are inclined to think that the good people of Conservative Party HQ have been getting a little confused again in recent days. You see, to mark the end of the month, when many people will be receiving their pay slips, they have been tweeting about the coalition’s success in raising the income tax personal allowance:

This …

Posted in News | 2 Comments

Chart of the day: how spending on day-to-day public services will have been cut by 37% by 2018-19

It is simply not true – as our critics on the left pretend – that we are slashing and burning the state. By the end of this Parliament, public spending will still be 42% of GDP. That’s higher than at any time between 1995 and when the banks crashed, in 2008.

    Nick Clegg, 10th March 2013

It’s a soothing line from Nick Clegg, designed to reassure Lib Dems that the Coalition’s austerity programme is simply curbing the spending excess of the Blair/Brown years.

photo by: Images_of_Money
Posted in News | Also tagged , , , and | 24 Comments

New poll: Voters credit low-earner tax-cuts to Lib Dems, Clegg’s ratings spike following Farage debate challenge

Here’s a poll finding that will relieve Lib Dems and worry Tories – according to Ipsos-Mori more voters (45%) credit the Lib Dems with the Coalition’s tax-cuts than credit the Tories (33%):

tax cuts lib dme credit ipsos mori

Posted in News and Polls | Also tagged , and | 31 Comments

Jeremy Browne questions wisdom of ratchet effect on tax cuts while the deficit remains so high

Jeremy BrowneThe Huffington Post reports some interesting comments by Jeremy Browne, Lib Dem MP for Taunton Deane and former foreign and home office minister. Browne expresses reservations over campaigns to raise the threshold further as a method of seeking to attract credit for the policy, suggesting that the Lib Dems should do so by reminding voters of the substantial increase that has already taken place.

Here’s an excerpt from the piece:

A former Lib Dem minister has criticised Nick Clegg’s flagship policy of pushing to increase the amount of money people can earn before the pay income tax.

Jeremy Browne, who served as a coalition Foreign Office minister and Home Office minister, said the Lib Dems should be careful not to message to voters there was “money to splash around” given the size of the deficit.

Posted in News | Also tagged | 17 Comments

Uncomfortable truths from the IFS on public spending and tax cuts but cautious optimism on economic growth

Last week, the highly-respected Institute for Fiscal Studies produced its annual “Green Budget”: its attempt to inject some realism into the national debate on the economy ahead of the chancellor’s actual budget in March.

The document makes for uncomfortable reading in parts, particularly as we head towards another general election in which the complicity of silence on deficit reduction is likely to be as deafening as it was in 2010.

IFS borrowingDeficit reduction: significant progress, but some way to go

Starting with the deficit, the IFS’s conclusions are stark. Had the government not taken steps to increase taxes and cut spending in the years since 2008, they estimate that the deficit would have reached 10% of national income by 2018-19. Because of the estimated 16.7% permanent reduction in economic capacity caused by the crash of 2008, 98% of that deficit would be “structural” – i.e. would not be expected to reduce naturally once growth picked up:

For an economy such as the UK, this level of borrowing would have been unsustainable on an ongoing basis. Public sector net debt would have increased markedly year-on-year, likely surpassing 100% of national income before the end of the current decade, and 200% within the next two decades.

Posted in Op-eds | Also tagged , , and | 30 Comments

Opinion: Making allowances – 12 conclusions about the Personal Allowance policy

CentreForum today published ‘Making allowances’ – a paper all about the Lib Dems’ flagship policy of raising the income tax Personal Allowance. Here are some of my conclusions – some obvious, some more obscure – to help inform future tax cuts.

1) The costs are huge. The coalition’s Personal Allowance increases have cost £11bn, and the Lib Dems’ minimum wage tax target would cost at least the same again. With this combined total, we could (roughly) reduce VAT to 15%; scrap council tax or business rates; easily deliver quality universal childcare; or

Posted in Op-eds | Also tagged , and | 16 Comments

Nick Clegg’s “worker’s bonus” – what I said about it on BBC’s Daily Politics

stephen-Tall-Daily-PoliticsI guested on BBC2’s Daily Politics on Monday to discuss Nick Clegg’s announcement that he wants the Coalition to offer a “worker’s bonus” in the next budget, taking the personal allowance up to £10,500 – beyond the £10,000 that was promised by the Lib Dems at the 2010 election.

The other two guests were ex-No. 10 Labour policy wonk Matthew Taylor, now chief executive of the RSA, and Conservative backbench MP Dominic Raab.

You can watch the 10-minute debate here (til 25th November).

Here’s my view in 6 sentences:

Posted in News | Also tagged , and | 5 Comments

David Cameron’s speech: meh, bah and hmm.

David Cameron - head in handsI missed David Cameron’s speech to the Conservative party conference today. Or, rather, I didn’t see or hear it, which isn’t quite the same thing as missing it.

Meh

But it sounds like, by missing it, I didn’t miss much. There were no dramatic announcements, no new initiatives. Yes, there was talk of the need to “nag and push and guide” young people to either “earn or learn” – the Department of Work and Pensions reports over a million people between the ages of 16 and 24 are …

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David Cameron poaches Lib Dem tax-cuts idea. (But that’s not half as annoying as the Tory ideas my party’s trying to claim.)

It’s amazing how much more popular with David Cameron the Lib Dems’ flagship policy of taking the low-paid out of income tax is these days… Just today he celebrated delivering an income tax cut for 25 million people and lifting 2.4 million low earners out of tax:

It’s all a bit of a contrast from the first 2010 televised leaders’ debate, when David Cameron argued the policy was unaffordable… unlike the Tories’ own proposals for raising the inheritance tax threshold to £1m or tax breaks for married couples, of course.

Posted in News and Op-eds | Also tagged , , , and | 16 Comments

“We cannot afford it” – Cameron on raising income tax threshold to £10k. In 2010.

With a hat-tip to Ed Stradling, here’s a reminder of what David Cameron told Nick Clegg about raising the income tax threshold in the first leaders’ debate:


(Watch it on YouTube here.)

I think it’s fair to say the Tories have since had a change of heart. Apparently it was their idea all the time:

Posted in News | Also tagged , , and | 11 Comments

Lynne Featherstone writes… Fairer tax for low earners and part time workers

International Development minister Lynne Featherstone writes a monthly column for one of her local newspapers. Here is the latest one…

Week after week, I meet local residents at my constituency advice surgeries. Many are working hard in full or part time jobs, but still struggling to make ends meet due to the current economic climate.

The unemployed and part timers often tell me they want to work more but also keep more of the money they earn.

The Lib Dems have known this for a long time. And from now, the amount you can earn before being taxed has risen to £9,440. …

Posted in LibLink | 3 Comments

LibLink: Danny Alexander – The rich are paying more in tax under the Coalition, than under Labour

Over at the Telegraph, Danny Alexander follows up his piece in last week’s Sun on Sunday defending the Coalition’s benefits and tax changes — Bedroom blockers and tax dodgers will pay — but this time in less tabloid terms:

… cleaning up the mess left by Labour involves difficult decisions everyday that impact on people’s lives up and down the country. Few more so than some of the changes to our tax and welfare system that have come in this week. The welfare changes this week are difficult, but right and necessary to ensure that people are always better off

Posted in LibLink | Also tagged and | 2 Comments

Nick Clegg’s Letter from the Leader: “Delivering fairer tax”

Nick Clegg’s latest letter looks ahead to the local elections in England, with a particular focus on the Lib Dems’ successful delivery of £600 in tax-cuts for the low-paid compared to Labour’s time in power. Here are three quick, clickable ways of promoting this achievement:

  • Sharing the news on Facebook;
  • Watching and sharing this YouTube video;
  • Re-tweeting Nick Clegg’s message:
  • Here’s Nick’s letter…

    Posted in News | Also tagged | 12 Comments

    New Tory ad campaign tries to claim credit for Lib Dem delivery of tax-cuts for the low-paid

    One Coalition policy, above all, polls strongly with the British public: lifting the income tax threshold to take the low-paid out of income tax altogether and to give a meaningful tax-cut to the lowest-paid.

    lib dem manifesto tax cutAs the Lib Dems have never been shy of reminding people, it was the party’s top priority at the 2010 general election. And it’s being implemented now because the Lib Dems are in government.

    The Tories, it seems, have, a bit belatedly, noticed that cutting the taxes of the low-paid is quite a savvy thing to do. So, the Spectator tells us, they’ve launched their own posters claiming the credit for this Lib Dem initiative.

    Such is politics. It’s worth recalling what the Tory tax pledges were in 2010:

    Posted in News | 8 Comments

    LibLink: Danny Alexander – Bedroom blockers and tax dodgers will pay

    Lib Dem chief secretary to the treasury Danny Alexander has published a robust defence of the Coalition’s welfare reforms in The Sun on Sunday. Here’s how it starts:

    Last week a young woman came to talk to me about her housing situation. Her frustration was obvious. She was working hard in a low-paid job and was stuck in an overcrowded home with a young family and desperately needed to move to a bigger home. She couldn’t understand why she had to wait so long to get a home that was the right size for her and her family. It’s a story

    Posted in LibLink | Also tagged , , , and | 50 Comments

    56% of Lib Dem members say: let’s now ensure no-one on minimum wage pays any income tax

    Lib Dem Voice polled our members-only forum recently to discover what Lib Dem members think of various political issues, the Coalition, and the performance of key party figures. Some 650 party members have responded, and we’re publishing the full results.

    56% say: no income tax for anyone paid less than the minimum wage

    In 2010, the Lib Dems pledged to increase the personal income tax allowance to £10,000, cutting the tax bills of low- and middle-income earners. Which of the following personal taxation policies, if any, would you most like to see the party campaigning on at the next election?

      6% – Re-introduce

    Posted in LDV Members poll | 7 Comments

    A brief (recent) history of the Lib Dems’ flagship tax-cut for the low-paid

    Tax Threshold infographicGeorge Osborne’s fourth budget saw him finalise the commitment to implement in full the Lib Dems’ number one manifesto commitment: taking out of income tax all those who earn less than £10k a year.

    It prompted this post by my Co-Editor Caron Lindsay yesterday – Why it’s worth being a member of the Liberal Democrats – recalling the recent history of this focus on raising the tax-free allowance. Which in turn triggered this comment by Alex Wilcock, recalling the slightly less recent history:

    The fact is, raising thresholds was party policy in the 1990s, then put back on the agenda when Chris Huhne made it the central plank of his Leadership campaign in February 2006.

    Curious, I thought I’d do a quick fact-check. Here’s what I found:

    Posted in News | Also tagged , , , , and | 6 Comments

    Budget 2013: Osborne crosses fingers and hopes ‘steady as she goes’ will come good by 2015

    George Osborne with Red Box, Budget 2012Move along, nothing to see here… This was a steady-as-she-goes budget at a time when the economy is anything-but-steady.

    Of course as Lib Dems it’s great to welcome the final push towards lifting all those paid less than £10,000 out of income tax. As my Co-Editor Caron Lindsay notes here, this is a policy direct from the front page of our 2010 manifesto to the Coalition’s budget. That’s no mean achievement — we know that because the Tories keep trying to claim it as …

    Posted in News and Op-eds | Also tagged , and | 13 Comments

    Lynne Featherstone writes… Three Lib Dem policies really stand out for me in 2012

    International Development minister Lynne Featherstone writes a monthly column for one of her local newspapers. Here is the latest one…

    What a year 2012 has been! There are three Lib Dem policies that really stand out for me this year: the Pupil Premium, income tax reductions for low paid and middle income workers and equal marriage.

    Before entering Government, the Lib Dems knew there were serious social mobility problems in the UK. Only one in five young people from the poorest families achieve five good GCSEs compared to three out of four from the richest families. Through the …

    Posted in Op-eds | Also tagged , , and | 13 Comments

    Danny Alexander: “We are delivering on our number one election pledge”

    Danny Alexander has just emailed Liberal Democrat members about the Autumn Statement, emphasising that the Liberal Democrats have delivered on their key election pledge, to raise the tax threshold to £10,000. From next April, workers will be able to keep the first £9440 they earn, meaning that someone on the minimum wage has had their tax bill halved by the Liberal Democrats.

    Danny asks members to share the picture on your right on Facebook. Already the Voice’s timeline is full of them.

    The Autumn Statement set out the tough decisions Liberal Democrats are taking in government to build a stronger economy and fairer society.

    Posted in News | Also tagged and | 18 Comments

    The Tories’ and Labour’s collective tax omnishambles

    Labour is against reducing the 50p top-rate tax to 45p for those earning more than £150,000. What could be clearer? As it happens, quite a lot could be clearer.

    First, the omnishambles…

    Given how widely predicted George Osborne’s decision to reduce the top-rate was you would have thought Labour would have anticipated it and worked out their line. They failed to — as Mark Pack noted here, Labour’s Shadow Business Secretary Chuka Umunna contradicted himself within 24 hours, while Shadow Chancellor Ed Balls declined to declare his hand.

    When Labour did …

    Posted in Op-eds | Also tagged , , , , and | 3 Comments

    Budget 2012: A strategic and substantive victory for the Lib Dems

    The big substantive Liberal Democrat wins that yesterday’s budget contained will be familiar to regular readers by now. However, I think it’s worth highlighting once again just how big a deal the increase in the personal allowance announced yesterday is. A rise of £1100 is unprecedented, and means that those earning the minimum wage and working full time will have seen their income tax bills halved because of the Liberal Democrats.

    Before Nick Clegg intervened publicly back in February to call for the threshold to be raised faster than previously anticipated, the working assumption was that it would be raised by …

    Posted in Op-eds | Also tagged | 7 Comments

    “Budget 2012: new tycoon tax in victory for Nick Clegg”

    “Budget 2012: new tycoon tax in victory for Nick Clegg” – so reports the Daily Telegraph:

    In a significant victory for the Liberal Democrats, the Chancellor effectively introduced a 25 per cent minimum rate of tax in the Budget.

    Under the changes, he will limit how much people offset their tax bills by investing in businesses or donating to charity.

    Anyone seeking to claim more than £50,000 of tax relief in any one year will have a cap set at 25 per cent of their income from 2013.

    Accountants said this means the wealthiest will have to pay at least 25 per cent of their income in tax. Although the highest rate of income tax is 50 per cent, reducing to 45 per cent next year, some wealthy people reduce their bills to almost nothing using different reliefs available from HM Revenue and Customs.

    The introduction of this major change to the tax system is one of the main reasons why, as I wrote yesterday, if you are on more than £150,000, you will pay an extra £1,300 a year in tax on average as a result of this Budget.

    As for what Labour would do on the 50p rate they seem to be flip and flopping with each new interview – sometimes saying they would reintroduce it if they had the chance tomorrow/next week, and sometimes not.

    For more on the Budget see a couple of the media interviews I did yesterday – first on the News Channel and then on Radio 4:

    Posted in Op-eds | Also tagged , , , and | 10 Comments

    The 50p tax rate is not for dropping – the leadership’s line

    Given some of the recent speculation over the 50p tax rate, the speech from Stephen Williams (Co-Chair of the Parliamentary Party Committee on the Treasury) opening the debate on tax policy was significant:

    Now is not the right time to drop the 50p tax rate.

    The full context left open if there might ever be a right time, but unlike speculation in The Times a few days back, there was no offer of trading off the 50p rate against the introduction of a mansion tax.

    His comments also reflected the text of the motion passed, which included:

    Posted in Conference and News | Also tagged , , , and | 2 Comments

    The Independent: Lib Dems should “make peace and move on” from the Health Bill

    Today’s Independent has an editorial with some friendly advice for the Liberal Democrats. The paper praises the party for the amendments made to the Health and Social Care Bill but advises that it’s now time to “make peace and move on” by passing the Bill:

    With the Liberal Democrats in Gateshead for their spring conference this weekend, NHS reform is once again top of the agenda. And once again grassroots activists are threatening rebellion. It would be a mistake – for the NHS and also for the party. It is time to make peace and move on.

    Last year’s conference was a

    Posted in LibLink | Also tagged and | 7 Comments

    Stephen Williams MP writes… What would you do with £60 extra every month?

    The Liberal Democrats are demanding that our Coalition Government gives you a much needed tax cut. We want to give hard-working people over £700 extra a year; that’s about £60 extra in your wages every month. Instead of helping millionaires, the Lib Dems want to give millions of deserving people a break. You can help us to get this tax cut announced in the Budget on 21st March.

    Please tell me today what you’d do with an extra £60 a month.

    By telling me how you’d use the £60 tax cut you’ll not only be spreading the word, you’ll also …

    Posted in Op-eds | 22 Comments



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