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 be telling those who oppose our plan that the time has come for real action.

What would you do with £60 extra each month? You could spend it on something fun like a trip to London during the Olympics or dinner out with your loved one. In these tough times £60 extra would come in handy for the weekly shop or quarterly gas bill.

At the last election the number one Lib Dem manifesto commitment was to raise the income tax threshold (or the zero rate band, to put it more simply) to £10,000 a year. It was the main demand made of both Labour and the Conservatives in the coalition negotiations. It is now being implemented by the Coalition Government.

Since entering government we have raised the threshold from £6,435 to £7,435. This has lifted over 800,000 people out of paying income tax altogether. It’s been a great benefit to those working part time. Students working in the local shop and parents balancing a part time job with child care have been helped by this policy.

The rise in the threshold has also meant a tax cut of £200 for basic rate tax payers – that’s everyone on salaries of up to about £43,000. The government has already announced that from April the threshold will rise again to £8,105. This means that 1.1 million part time workers will have been lifted out of tax.

Now I want the Coalition to go further and faster towards the goal of £10,000 tax free pay, which would give you £60 extra per month. And how would I spend it? Well, it’s been a long time since I watched Wales play rugby and with a Grand Slam on the cards, a trip to Cardiff Millennium Stadium would be my treat!

Whatever you’d spend it on, let us know and help make this happen today.

* Stephen Williams was the Liberal Democrat MP for Bristol West 2005-2015 and was Minister for Communities in the Coalition Government.

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  • What would a massive tax cut, skewed towards the better paid and giving nothing to the least well off, mean to me? A bigger deficit, mainly.

  • Richard Dean 9th Mar '12 - 2:58pm

    I would give it back to the governmemt who would then be able to invest the 21 billion the cut costs annually in projects that reduce unemployment, especially amongst the young.

  • I will use my £60 ‘tax cut’ to offset the additional costs of the VAT rise. Or I might give it to a charity working with the vulnerable or disabled , as they’ve had their funding cut.

  • I’m undecided. Either I’ll send it back in disgust, or I’ll donate it to a charity that’s had its government funding cut. That’s the Big Society thing to do, don’t you think?

  • This is the canonical question always asked by Lib Dems when campaigning. Its generic form is “would you like more of something good at no cost?”.

    This is usually followed up with two statements and a rhetorical question. 1) Lib Dems want to give you good things. 2) Non-Lib-Dems want to give you bad things. Do you agree that Lib Dems are better than the others?

  • Would Stephen benefit from this? Wasn’t the threshold for 40% taxpayers changed last time so that the only beneficiaries of an allowance uplift with those taxpayers paying the 20% rate.

    If you can get Wales France tickets for £60 can you pick one up for me as well 🙂

  • Hywel,

    Yes it was. When the allowance increased by £1000 from £6475 to £7475, the threshold for 40% taxpayers was lowered by £2400 from £37,400 to £35,000.

    An MP with taxable earnings of £65,000 in 2010/11 paid £15,930 in tax. In 2011/12 he paid £16,010 in tax on the same income plus an extra 1% national insurance on all his earnings above £5304, amounting to an extra £570 or so. All in all, he was around £650 down as a result.

    So, I think you are right. Stephen may have to bang the rugby ticket on the credit card after all.

  • Stuart Mitchell 9th Mar '12 - 7:35pm

    I know where my “tax cut” is going – it will be used to replace my child tax credit, which disapears from next month, and to cover the extra VAT I’m paying. Like the vast majority of people in the country, I am a net loser from this government’s tax changes. Which is fair enough – I see the need for it and I honestly don’t mind. The only thing I object to is that the government keeps telling me it’s giving me a tax cut when it isn’t.

    By the way, those who think that next month’s threshold increase will be worth an extra £134 pa in their pockets should puzzle over paragraph A.19 of the last budget report, which says :-

    “23 million working age people earning over £7,865 a year will gain from the personal allowance increase announced in this Budget. They will pay more NICs when this is indexed by the Consumer Prices Index, but will still gain in 2012-13 by £42 on average a year. Around 370,000 individuals earning between £7,500 and £7,900 will pay up to £6.25 extra NICs a year in 2012-13 and will not gain from the personal allowance increase.”

    This re-indexing of NICS is a particularly effective stealth tax in that hardly anybody is aware of it, but its value to the exchequer will increase exponentially in the years ahead, according to table 2.1 of the budget report.

    Like the man said: the government giveth, the government taketh away…

    @Richard – the threshold increases cost nowhere near £21bn per year. The two announced so far (taking the threshold from £6,335 to £8,105) only cost aronud £4.5bn per year.

  • I’m fed up of poiliticians of all political hues going on about “hard working families/people”. How do you know they’re hard working? . Doesn’t everyone who pays income tax receive a cut whether they’re hard working or not. Arguably, it’s those who work less hard, ie part timers, who benefit with their lower salaries. No doubt the phrase is trotted out having ticked boxes in some focus groups!!

    At least ” hard-working people” is a marginal improvement on “hard working families” as presumably single people don’t count!

  • I don’t know anyone who is only affected by this policy and not all the others that raise/lower taxes/benefits/public service provision etc. So its a stupid question on many levels. I don’t have an extra £60. But at least I still have a job, which might not have been the case had the Tories failed to form a government in this economic climate. What is £60 anyway – I can’t even fill up my car with that these days.

  • It’s not an extra £60/month – that’s just misleading. It’s an extra £45/month on this year’s tax schedule, or an extra £30/month on next year’s. It’s only an extra £60/month if you believe Osborne is likely to lower the personal allowance to the 2009/2010 level at the next budget.

  • @johng
    Completely agree! I’m sick of hearing “hard working” trotted out as shorthand for “basic rate taxpayers” (a) when so many are clearly not hard working and (b) as though everyone with taxable income over £35K has it easy, when most have worked their butts off to get to that position.

  • Stuart Mitchell 10th Mar '12 - 10:27am

    Johng: “Doesn’t everyone who pays income tax receive a cut whether they’re hard working or not. Arguably, it’s those who work less hard, ie part timers, who benefit with their lower salaries.”

    That’s a sweeping generalisation! My wife’s employment is part-time but she spends the balance of her time on child care and housework. She “works” a lot harder than I do, difference is she doesn’t get paid for it.

    Dave: It’s not just VAT. It’s NICS, child tax credits, working tax credits, and many others. If the tax threshold increase alone were enough to cancel that out, then please explain why the government’s own budget impact analysis showed every single income centile posting a net loss.

    It’s not the fact that we’re paying more tax that is the problem here. The problem is that the government hoodwinking us by pretending it’s cutting our taxes. Don’t you think that’s a little dishonest?

  • Yes, aside from the fantasy £60 extra figure, the withdrawal of tax credits mean the lowest paid hardly gain at all –

  • daft h'a'porth 10th Mar '12 - 2:20pm

    “What would you do with £60 extra each month? You could spend it on something fun like a trip to London during the Olympics or dinner out with your loved one”

    Surely you jest. The 2-hour trip to London from here is already one of the most expensive train lines in England, and that’s before you lot introduce the super peak train fares that I hear you’re planning to inflict on us!

  • Richard Dean 11th Mar '12 - 1:59am

    @Stuart Mitchell. Thanks for the correction, which leaves me puzzled. If about 30 million taxpayers gain £720 per year, the net loss to the treasury is 30 million x £720, which comes out at a little over 21 billion. Obviously I don’t have much idea about these things, I’ve probably completely misunderstood (a common occurrence!). I would appreciate anyone explaining it to me. Thanks!

  • I’d also point out that “hard working taxpayers” also excludes people who care for others such as disabled family members – not only doing one of the hardest jobs available but saving the state a fortune in terms of providing care itself, and unpaid to boot.

  • My life is harder than ever, but I won’t be getting this, just more spirit-crushing job rejections. Its a shame, because job-seekers allowance is so low that it does not even cover basic food and bills. I had no heating over winter, and am eating much less than normal which means I feel very tired.

    Food costs have risen 30% in the last 4 years, and utility bills went up 15-18% just last year, yet job-seekers allowance will only go up by 5.2%. Job-seekers will also be forced to work full time in profits making companies… the consequences are frightening.

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