In a move which will surprise nobody, another of those items from the front page of the manifesto has been announced as a red line in coalition negotiations with strings attached.
- Significant progress must be made to getting to £12,500 in the first year of the next parliament, by increasing the allowance to £11,000 by April 2016.
- This increase must be paid for fairly and cannot be funded through cuts to public services.
- This has to be the number one tax priority of the new government. Any other tax priorities must be secondary to delivering the increase in the Personal Allowance.
So the Tories can forget any notion of cutting taxes for the rich until this has been fulfilled. What does this mean for Labour’s Mansion Tax, though? Surely you would want to bring that in at the same time? Actually, Danny Alexander clarified that. There’s not much love for Labour’s 10p tax band. You do wonder why they even thought about revisiting that one. Danny said:
Just two days ago the IFS described Labour’s proposed 10p tax rate as having a ‘miniscule effect’. Compare that to the millions of workers who will be getting their pay cheques today and will be £70 better off a month, thanks to the Liberal Democrats in government.
Nick Clegg said:
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