New campaign poster highlights tax cut.

The party issued a new poster today to highlight the raising of the tax threshold which comes into effect on Monday. It means that every taxpayer is £825 a year better off thanks to the implementation of the pledge that was on the font page of our manifesto.

Tax cuts election poster

 

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52 Comments

  • The Daily Telegraph reported on this poster launch thus :

    http://www.telegraph.co.uk/news/politics/nick-clegg/11514341/RIP-Cleggmania-the-proof-Nick-Cleggs-moment-in-the-sun-is-well-and-truly-over.html

    Was anyone there and is the DT’s reporting accurate? I would not be surprised if it wasn’t.

  • How long do you think it will be before there will be posters by your rivals that blare out the promises not kept ?

    Another self-inflicted injury.

  • Nick – interesting point. Maybe reminisent of the Euro campaign morphing from “In Europe, In Work” to “The Party of In”

  • ” It means that every taxpayer is £825 a year better off thanks to the implementation of the pledge that was on the font page of our manifesto.”

    Obviously false. But anyway … I’m in my 40’s, well-paid, mortgage-free. I had free tuition and a maintenance grant for both my degrees. Why have you given people like me a tax cut while hammering the young and the poor?

  • David Allen 3rd Apr '15 - 3:52pm

    There’s lots of nice white space, ready to be filled in with a spray can, on this poster. Someone might, for example, write “Bullocks” below the words “Promise kept”. Or something.

  • I’m not voting LibDem but I wouldn’t believe the DT to report ‘fairly’ on anything to do with this election….

  • Bill le Breton 3rd Apr '15 - 4:20pm

    My thoughts exactly Nick – So much for professional messaging.

    And just who is in charge of media and brand management in this campaign?

    On Monday, someone let the Leader walk blissfully in front of a sign ‘Danger – Deep Water’ and today we send the leader out into an empty car park to give a really rambling, unstructured interview whilst Labour practiced a straight forward bit of ambush marketing.

    Someone has to take a grip and quickly.

    I suggest we have from 2.00pm Sunday to 6 am Monday to effect the necessary changes to personnel. If anyone would like the telephone numbers of the Party’s best campaigners, please get in touch. Of course they may not feel like risking their reputations on such a cause.

  • Nick Collins 3rd Apr '15 - 4:30pm

    ” Look left, look right, then Cross”. What a vacuous slogan. If I were still a member of the LibDem party, I would be embarrassed. Pitiful.

  • It would be a good slogan for a party of Christian Democrats, but I thought Nick didn’t believe in crosses.

  • “It means that every taxpayer is £825 a year better off thanks to the implementation of the pledge that was on the font page of our manifesto.”

    Just to recap… The front page said “fair taxes that put money back in your pocket”.

    The specific pledge can be found on page 6 :-

    “• The first £10,000 you earn tax-free: a tax cut of £700 for most people
    • 3.6 million low earners and pensioners freed from income tax completely
    Paid for in full by closing loopholes that unfairly benefit the wealthy and polluters

    My emphasis.

  • Paul In Wokingham 3rd Apr '15 - 5:10pm

    @AndrewR: Why is it “obviously false”?

    In 2009/2010 someone earning £20K gross would have taken home £15723 (£2706 tax plus £1571 NI).
    In 2014/2015 someone earning £20K gross would have taken home £16555 (£2000 tax plus £1445 NI).

    £16555-£15723 = £832 which is marginally more than the amount shown in the poster.

  • Paul In Wokingham …

    “Better off” implies that everything except for this tax has stayed the same; they haven’t…
    A more accurate statement would be to use, as you have, “Take home pay has gone up by £832”

  • @Paul in Wokingham
    The claim is that every taxpayer is £825 a year better off. But by your own figures every taxpayer would have to earn at least £20K before that was true.

  • It was a pooled interview. I have seen it on Sky and the BBC throughout the day. Coverage of the Labour stunt bar the Telergraph article is zero. That the Telegraph are not LibDem fans, well I am truly shocked.

  • ATF, well quite so. That’s why I asked if anyone who was actually there could tell us what really happened.

  • Paul in Wokingham, why does the NI figure in your two columns fall from £1571 to £1445 ?? Has there been an NI decrease in the last five years ? {scratches head}

  • David-1. I don’t think we should really be bringing Nick Clegg’s faith into this, but I agree with Nick Collins, that slogan is pretty meaningless. As I also said in a previous post the “We would cut less than the Tories and spend less than Labour” slogan is also not great. Let’s get some conviction back into this campaign and say what we stand for not what we don;t stand for. No one can positively identify with a negative message.

  • Paul In Wokingham 3rd Apr '15 - 6:23pm

    @AndrewR: Yes, I agree that the wording in the article is wrong and simply failed to notice that your “obviously false” statement was in reference to that rather than the billboard. My mistake. I should note that for someone working at minimum wage of £6.50 per hour for – say – 35 hours per week (equivalent to £11830 per annum), the increase in take home pay since 2009/2010 is £910 (from £10086 in 09/10 to £10999 in 14/15.

  • Every tax payer, earning above X who isn’t on any earnings related benefits will be £825 better off just doesn’t have the same ring…….

  • It isn’t the poster that’s wrong but the part of the accompanying article that says “It means that every taxpayer is £825 a year better off thanks to the implementation of the pledge that was on the font page of our manifesto.”

    This is better than having it the other way round and something that should be shouted from the rooftops as the Tories knocking on my door seem to think it was their idea……

  • Philip Rolle 3rd Apr '15 - 6:40pm

    Unless I’m mistaken, the higher rate threshold was reduced to eliminate the benefit for higher rate taxpayers.
    And the benefit to basic rate taxpayers needs to be offset by the VAT increase, reduction in tax credits, Labour’s national insurance rise ( not cancelled ) and no doubt a number of other impositions that for the moment I forget.

    So, about even then.

  • @Simon Shaw
    “Certainly there has been a massive closing up of loopholes that unfairly benefit the wealthy”

    Like what, and how much has it brought in? Enough to cover the allowance increase “in full” as promised?

    I also note that the pledge implies the sort of hypothecation you often tell us does not happen, so I presume you think the whole pledge was nonsense anyway..?

    “The only exception is that if someone had an income of (say) £8,000 pa in 2009/10 then they wouldn’t be the full £825 better off

    So the policy has benefitted the rich more than the lowest paid. How angry does that make you Simon?

    @Philip Rolle
    “And the benefit to basic rate taxpayers needs to be offset by the VAT increase, reduction in tax credits, Labour’s national insurance rise ( not cancelled ) and no doubt a number of other impositions that for the moment I forget.

    Well quite. My wife is one of the low-paid workers who Simon tells us did not get the full benefit of the policy. One of the first things the government did was remove our child tax credit (£540 I think). And the government went ahead with the NI increase. The latter two measures were both, according to the government, necessary to pay for the allowance increase.

    So when the Lib Dems tell me and my wife we’re £1,650 better off, it’s a load of baloney, isn’t it?

  • Philip Thomas 3rd Apr '15 - 8:29pm

    As I have just been reminded by a higher-rate taxpayer, the increase in the personal allowance is clawed back for higher-rate taxpayers. So, no the richest don’t benefit from this tax cut. The middle class benefit, if you arbitrarily call the middle class those who pay basic rate income tax…some might call them the working class.

  • @Simon Shaw
    ‘Virtually every’ isn’t true either is it? Millions of taxpayers don’t earn enough to fully benefit from the increase in the personal allowance.

    @Philip Thomas
    Only some of the increase in the personal allowance was offset by lowering the higher rate tax band. In the last budget, for instance, the higher band was actually increased and higher rate taxpayers gained more than those on the basic rate.

  • Philip Thomas 3rd Apr '15 - 9:27pm

    @AndrewR- clawback is a different effect from the level at which higher-rate tax is charged.

  • As this poster has Clegg on it, shouldnt it read “look right, look right..”?

  • – Simon Shaw
    I was wrong in part of my response to Paul. But the claim in the article is obviously false as is your claim that virtually every taxpayer has benefited from the raising of the personal allowance. I notice that no Lib Dem has contested or answered my substantive point – why have you given tax cuts to the well-off while removing support from the young and the poor?

  • Alex Sabine 4th Apr '15 - 1:29am

    Philip is right about the ‘clawback’ above £100,000 – but this was introduced by Labour not the coalition. It is actually a pretty stupid feature of the income tax structure that creates a marginal rate of 60% which then drops to 40% again before rising to the 45% top rate at £150,000. As the IFS has pointed out on several occasions, in terms of rational tax system design it is indefensible. But it does mean the increases in the personal allowance have not benefited those with incomes above £100K.

    There are several different, and equally valid, answers to the question of who has gained most from the higher PA.

    – If you look at the household income distribution and split it into deciles, the largest proportionate gains are in deciles 6-8, so the middle and upper-middle. The reason for this is that these households tend to have two earners. Since income tax is levied on an individual basis in the UK, each earner gains individually from the higher PA so there is a potential gain of circa £1,650 rather than the maximum £825 or so which would go to a single-earner household.

    – Looked at from the perspective of an individual taxpayer, the distributional effect is quite different. The cash gains are the same for most basic-rate taxpayers, but the proportionate gains are greatest at the lower end. £825 is clearly worth more to someone on the minimum wage than it is to someone earning £40,000.

    – Moreover, there are other positive effects for the low-paid specifically. The most obvious is that nearly 4 million of them have been taken out of the income tax net altogether. The effect of this is to reduce the marginal tax rate across the band of income between the old threshold and the new, higher threshold by 20 percentage points, strengthening work incentives.

  • Alex Sabine 4th Apr '15 - 1:45am

    Just to make it clear, there are two different ways in which the benefit from increasing the personal allowance is not passed on to higher-rate taxpayers:

    1. Above £100K the PA is withdrawn (it is reduced by £1 for every £2 above this level of ‘adjusted net income’, until fully withdrawn – this is what creates the 60p marginal rate between £100,000 and £121,200)

    2. For most higher-rate taxpayers (those earning between a little more than £40,000 and £100,000) the gain has been limited by lowering the point at which the 40p rate kicks in. Despite the slight increase in the most recent Budget the ‘higher-rate threshold’ has been reduced significantly in real terms, pulling a lot more people into the 40p bracket.

  • Stephen Hesketh 4th Apr '15 - 7:58am

    “Look left. Look right. Then cross”

    Perhaps indicating a non-British writer, an interesting ‘Freudian’ insight or a very deliberate wording by those writing and approving this classic political advertising, but due to the greatest danger occurring from the right (in UK traffic terms), surely the standard British usage is “Look right, look left, …”

    Would the greatest automatic resonance with British voters not therefore have been achieved using the standard British usage?

    Just observing!

  • Julian Gibb 4th Apr '15 - 8:19am

    The Daily Telegraph has reached a new low as regards journalistic integrity. A Whitehall lie/smear was ran yesterday (and continues to run). It was then copied by the Daily Mail and the BBC.
    http://wingsoverscotland.com/leesten-varry-caurfelly/

  • @Simon Shaw
    “I don’t know how much it has it brought in. I would suspect not enough to cover the allowance increase in full.”

    So given that the Lib Dem pledge contained the words “in full”, you accept the pledge was not kept?

    “it doesn’t make me in the least angry”

    Your happiness to throw money at people on good incomes while taking money away from people on very low incomes is duly noted.

  • Paul in Wokingham 4th Apr '15 - 9:41am

    @Stephen Hesketh – nice catch. The green cross code was indeed “look right, look left, look right again. And if all is clear walk straight across”. If you take the slogan literally then you are likely to get run over by a juggernaut.

  • Julian Gibb 4th Apr ’15 – 8:19am…..The Daily Telegraph has reached a new low as regards journalistic integrity….

    What little journalistic integrity the DT ever had was bought, and paid for, by HSBC

  • Paul in Wokingham 4th Apr ’15 – 9:41am
    @Stephen Hesketh – nice catch. The green cross code was indeed “look right, look left, look right again…..”.

    Paul, if you google the phrase – “look right, look left, look right again” you will find the link to a YouTube film from ‘Justice Project South Africa’.

    Needless to say – it does not end well.

  • @Simon Shaw
    “The pledge is what you say you plan to do, not how you plan to do it”

    Unless “how you plan to do it” is explicitly stated within the text of the pledge, in which case it’s a part of the pledge. That much is obvious, to everybody except you perhaps.

    “And your observation that those on £12,000 or £16,000 pa are ”people on good incomes” who are having money thrown at them (how patronising is that?) is also duly noted.”

    It’s funny, but when I referred to “people on good incomes” I naively assumed that you would understand I was referring to people at the upper end of the scale of those who have benefitted fully from the allowance increases (i.e. those earning up to just above £40,000).

    I thought it would be obvious to you that someone on £40,000 is on a much better income than someone on £12,000 or £8,000. Sorry for my mistake.

    But now that we’ve cleared up that little misunderstanding – how do you feel about the fact that someone on a good income of (say) £40,000 has benefitted much more from this policy than someone on a very low income?

    By the way, before we start feeling too sorry for those higher-rate taxpayers who had some of the benefits from the increased allowance clawed back :-

    http://www.theguardian.com/money/2015/mar/18/budget-2015-highest-earners-benefit-most-1bn-income-tax-giveaway

  • @Simon Shaw
    “Really?”

    Yes, really – it’s quite obvious.

    Adapting your analogy to make it more relevant…

    Suppose the two front wheels on your car are damaged. You take it to a garage and the owner says “sure, I’ll replace those wheels for you, I’ll have it done by this afternoon”.

    You go back later to find that the front wheels have been replaced all right – but with your own back wheels. The back of the car being propped up on axle stands.

    By your rather odd way of looking at things – the garage owner has kept his pledge to you, because he’s replaced the front wheels. Doesn’t matter how he did it – he’s replaced them. But somehow, I don’t think you’d be satisfied with this arrangement.

    The wheels have certainly come off your argument Simon!

    I note you still won’t answer the question I asked – how happy do you feel about someone on £40,000 getting the full benefit of the allowance increase while somebody on very low pay gets little or nothing?

  • Alex Sabine 5th Apr '15 - 2:41am

    Much as I’m enjoying this garage analogy, I don’t think we should get into the habit of telling customers that when they have to pay a bit less for the services rendered they are having money “thrown at them”! By all means look at distributional analysis but let’s not start from the premise that all money belongs to the government. Tax cuts may or may not be justified in terms of fiscal prudence or distributional considerations but they are not gifts or even “giveaways”. They simply mean the government is pre-empting less of the nation’s resources for collective uses and leaving more in the pockets of the population.

    Moreover, it is in the nature of tax cuts that the benefits are confined to taxpayers. If the objection to increasing the personal allowance is that it benefits the majority of workers and not just the low-paid, this argument applies to any remission that can be delivered via the direct tax system. The direct tax system is progressive, so reducing direct taxes will not benefit those on the lowest incomes and will typically benefit those on a wide range of incomes. This is not a clinching argument against it in my view – quite the opposite – but it does make it ‘expensive’ as a means of helping the low-paid. Raising the NI threshold would be a better targeted way of doing so given the fiscal constraints.

    But reducing the marginal tax rate on low-paid work by 20 percentage points is not to be sniffed at. The catch is the interaction with benefit withdrawal tapers; and reducing the work allowances in Universal Credit before it has even been properly rolled out is not helpful in this regard.

  • @Alex Sabine
    “Tax cuts may or may not be justified in terms of fiscal prudence or distributional considerations but they are not gifts or even ‘giveaways’. “

    Of course not, but pretty much everybody (including all political parties) refer to them as such (e.g. the Lib Dems often refer to “putting money back in people’s pockets”). Sometimes people just adopt language that isn’t necessarily correct in a way that would please a pedant, but everybody understands what it means.

    Besides, given that we live in a modern economy where the government takes about a third of our annual GDP in tax, it’s perfectly reasonable to talk about the government throwing money around in one direction or another.

    “I don’t think we should get into the habit of telling customers that when they have to pay a bit less for the services rendered they are having money ‘thrown at them’!

    Especially when it isn’t even true, which is why I’m calling out the Lib Dems’ highly misleading rhetoric on this.

    Going back to the garage analogy… Suppose you need two jobs doing on your car; the cam belt needs changing, and the wheels realigning. The garage owner says it will probably cost £250 for the cam belt and £50 for the wheel realignment i.e. £300 in total. When you go to pick up the car, the guy tells you that he’s done the cam belt for just £200, £50 less than originally quoted. Great! But then he tells you that the wheel realignment has cost more than expected i.e. £100. The total cost therefore is exactly the same as before, £300.

    Do you walk away from the garage feeling like you’ve just paid “a bit less for the services rendered”? If you’re Simon and the proprietor of the garage is Nick Clegg, the answer apparently is Yes.

  • John Roffey 5th Apr '15 - 1:29pm

    I know it is not a popular truth – but the Party’s tax policy is of no concern – it will not have any significance after 7 May.

    If by a miracle the next government is not an outright Labour/SNP coalition of some type – and it is needed to add the final seats to this arrangement – it will represent, optimistically, 1/10th of the groups strength and more likely less than 1/15th.

    It might be allowed one policy – and this will almost certainly not be related to taxation.

  • Alex Sabine 5th Apr '15 - 2:35pm

    Hi Stuart,

    “Of course not, but pretty much everybody (including all political parties) refer to them as such (e.g. the Lib Dems often refer to “putting money back in people’s pockets”). Sometimes people just adopt language that isn’t necessarily correct in a way that would please a pedant, but everybody understands what it means.”

    Sure, and I call out the Lib Dems and Tories when they do it too. Similarly, I do wince at assertions like “this government has created X million jobs” when the most they should be claiming is that they have created the conditions for such job expansion by private enterprise. You could call this pedantry, but I think there is an important difference of substance that betrays a different way of thinking about who income belongs to in the first instance and how jobs are created.

    Of course I accept that we do need shorthands. For example, economic commentators talk about Budgets containing tax “giveaways” and “takeaways” in a way that is not intended to be value-laden. It simply describes a quantitative change. It might not be ideal but it avoids more ponderous or jargon-heavy phrases like “discretionary tax reductions/increases”. To that extent it can aid communication.

    Unfortunately it does encourage bad habits in politicians, who use the language of giving in a more tendentious and intentionally loaded way (naturally they try to avoid talking about what they have taken: typically this is referred to as “asking for a contribution”). Gordon Brown used Budget speeches to pose as Father Christmas, but plenty of other politicians seem to think they create money out of thin air and that by spending it they are being generous – rather than simply making a judgement (on which equally generous-spirited people can disagree) about how much of the population’s income should be pre-empted for collective purposes.

    I do think there is a difference between describing a tax cut as “giving” people money, or “throwing money” at them, and describing it as “putting money back in people’s pockets”. Since it came from taxpayers in the first place, the latter description is more accurate.

    Of corse, if a tax cut in one area (say an increase in the personal allowance) is financed by a tax rise in another (say VAT), then you aren’t really putting money back in people’s pockets but shuffling it around (since a given amount of money will not stretch as far).

    You are right to point out that isolating the personal allowance from the other tax changes paints a misleading picture. Overall, the taxman is taking almost exactly the same slice of national income as he did five years ago, approximately 36% (it was 35.5% in 2009-10 and is the same this year). Given the huge deficit net tax cuts were never likely. Within that stable total the tax burden has been shifted around substantially, with reductions in income tax, corporation tax and fuel duty financed by higher VAT, lower pensions tax relief and so on. The increase in the personal allowance and the increase in VAT have broadly offset each other in revenue terms.

    The switch from direct to indirect taxation reflected a judgement that income tax used to cut in at too low a level, just £6,475 in 2010-11, and that in principle we should not be taxing the earnings of people on the minimum wage (although achieving this is obviously a longer-term goal). I share that view, but note that National Insurance still cuts in at a fairly low level and is a tax specifically on labour income. In my view raising the NI threshold should come before further rises in the PA. It would also be more “progressive”, but that is only one of several attractions of aligning the income tax and NI thresholds.

  • @Alex
    “Similarly, I do wince at assertions like ‘this government has created X million jobs’ when the most they should be claiming is that they have created the conditions for such job expansion by private enterprise.”

    I wince at that too, especially when we know that around half of the new jobs “created” are actually people who are self-employed. Many of these people have felt forced into going self-employed after losing or failing to find other jobs, and many of them are on extremely low pay.

    I noted last week that the business leaders who wrote to the Telegraph also tried to claim credit for the 1.8 million new jobs (“businesses like ours have created over 1.85m new jobs”), which is just as inaccurate.

  • Matthew Huntbach 6th Apr '15 - 12:14pm

    Alex Sabine

    Of course, if a tax cut in one area (say an increase in the personal allowance) is financed by a tax rise in another (say VAT), then you aren’t really putting money back in people’s pockets but shuffling it around (since a given amount of money will not stretch as far).

    If a tax cut in one area results in people having to make more private spending you aren’t really putting money back into people’s pockets. If people are having to spend more on private pensions, health care insurance and the like due to lack of public provision of these things, there’s no giveaway.

    As you say, the overall take in tax as a slice of national income has not changed much. Yet there are big demographic pressures which should be pushing it up if we kept the level of state provision as it has been. In 2010-2015, one thing cracked – state subsidy of university tuition. We cannot have a big increase in the number of people going to university, the same level of state subsidy of universities as we had when only a small proportion of school-leavers went to university, and no increase in taxation. So, we didn’t have the increase in taxation, and so we had to cut the level of state subsidy to universities. Isn’t this rather obvious? So why is it not at the centre of political debate? Why are tuition fees discussed as if the Liberal Democrats’ line on this was an isolated policy with no balancing factors?

    Nick Clegg apologised for the U-turn on tuition fees saying “we couldn’t afford it”, which was wrong. We could afford it, but the people of this country decided they didn’t want to raise the tax necessary to afford it. They did this directly by voting Conservative and indirectly giving the impression that any big tax rises were politically unacceptable whoever proposed them. We are now hearing the line that the NHS cannot be afforded. Of course it can, if it couldn’t people really would be dying through lack of health care. If people are not dying but instead paying to keep themselves alive privately, it can be afforded, people have just decided not to do it through the tax and state provision way. That’s THEIR choice, and politics should be about that.

    But it isn’t, and this “£825 tax cut delivered to working families” is typical of the way it isn’t. It’s presented as a giveaway with no balancing costs. Sorry, that’s immoral and undemocratic. People need to know what it’s about both ways. If people want lower taxes and lower state provision it should be put to them directly so that there is no doubt they have agreed to it properly. Putting the tax cuts without the balancing service cuts does not do that. People are misled into thinking of it as a giveaway, and cannot really be said to have consented to the balancing service cuts.

    My own political position is that I am deeply unconvinced by the argument that there are skilled people who could do much to improve society lying in their beds saying “I won’t bother, because if I do, I’ll have to pay big taxes on it”. So I’m sceptical about the line that we need to keep taxes low because we rely on people like this. All my experience suggests that people who really do have good things to contribute, skills they can use to provide them, aren’t motivated just by money. The people who might not work because of taxes are spiv-types, whose work is money-shuffling rather than real wealth creation. So I believe there is a strong argument for pushing taxes higher to meet the infrastructure needs of a more complex society, and the environmental and demographic challenges we face.

    A true party of the left would be doing that, and Labour isn’t. I disagree deeply with what seems to be at the centre of the Liberal Democrat campaign, as in this poster, that Labour is a party that is too left-wing. Nonsense, Labour now is a centre-right party in terms of long-term British politics. It is offering nothing of the sort that it used to offer and that the Liberal Democrats and Liberals offered in the past. The panic reaction to the bank crisis at the end of the last Labour government, resulting in a big increase in state borrowing most certainly does NOT mark Labour out as a far-left party, which is what this poster underneath is suggesting.

    I do not believe tax cuts of the sort mentioned in this poster should be a priority when we need to be putting more money into health care if we want to keep an NHS, as we say we do, when we have to bring down the deficit, and when we have to do something to reverse the long-term damage done by emergency government cuts made by recent governments.

    I cannot go out and campaign for the Liberal Democrats on the lines put in this poster. So I am not. These words put here convince me to stick to the line I’ve taken for a while – I’m a Liberal Democrat on strike, and I’ll remain in strike while the Cleggies at the top carry on pushing my party to the extreme economic right.

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