We have another red line – raising the personal tax allowance to £12,500

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:

The Liberal Democrats have delivered the biggest set of tax cuts in generation for working people, cutting taxes for millions of people by £825. Everyone who receives their pay packet today will be paying £70 less in tax a month because there are Liberal Democrats in government.

We are making increasing the Personal Allowance to £12,500 a ‘red line’ for any coalition negotiation. That way the British public know that no matter the colour of the government, if the Liberal Democrats are a part of it, their taxes will be cut.

We had to fight tough and nail with the Conservatives to deliver tax cuts worth £825 to 27 million people. We won’t let them prioritise any of their other tax gimmicks ahead of delivering another £400 tax cut for people on low and middle incomes.

During this General Election, there is only one party with a track record of promising tax cuts on the front page of its manifesto and delivering them straight into the pockets of low and middle income families up and down the country. That is the Liberal Democrats.

I did have a minor strop when I first saw the announcement, thinking “where’s mental health?” Then I remembered I’d said the other day that we needed something that was going to affect people across the entire UK. The stability budget does that but the tax allowance is something that every worker or pensioner will see the benefit of in their pay packets.

So, anyone fancy a guess at the next red line to be announced? We already have education and the “stability budget.” Or, what do we think should be a red line? You don’t have to be entirely serious.

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings

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40 Comments

  • Eddie Sammon 29th Apr '15 - 10:01pm

    What happens if the economy crashes or we need to ramp up spending in other areas in an emergency? There needs to be a get out clause on these red lines.

    I’m not going to respond to any questions on this thread I am afraid. I have spent too much time debating recently. 🙂

    Best wishes

  • Tony Greaves 29th Apr '15 - 10:05pm

    This is the most ridiculous, dishonest and generally depressing election campaign in my lifetime (and they have been getting steadily worse). From all parties. Anyone who thinks you can make pledges, red lines, promises, anything else on the economy for five years ahead is either living in cloud cuckoo land or not being honest. Or both.

    Tony

  • WildColonialBoy 29th Apr '15 - 10:17pm

    It’s also incredibly telling that Clegg refuses to have any involvement with the SNP. He’s basically looking for anything that will appear as an excuse to do another deal with the Tories.

    He’s taken a once great party and destroyed it. The Lib Dems might hang on to 30 odd seats at this election, but they will be gone after the next one.

  • ” Everyone who receives their pay packet today will be paying £70 less in tax a month because there are Liberal Democrats in government.”

    What a blatant lie and a disgraceful one at that.

    Considering 44% of adults who do not earn enough to pay any income tax as the IFS pointed out
    “http://www.ifs.org.uk/uploads/publications/bns/BN172.pdf”
    “Only 56% of adults now pay income tax, down from 61% in 2010–11, and of course
    further increases in the personal allowance will not help the 44% who pay no income tax.”

    It gets clearer by the day that Nick Clegg is only interested in a coalition with the Tories.
    Making raising the £12.5k a Red line issue when it is also a Tory Pledge and has been detailed in the latest Autumn Statement.

    The only thing that was not making any sense to me is this Red Line on Budget Responsibility.
    If the Libdems end up in coalition with the Tories again, why would they need an emergency budget when the current budget signed off by the coalition only last month covers spending for 2015/16? After all Nick Clegg told us that this was a Libdem budget and had Libdem all over it as much as Conservative.
    Clearly this red line issue is an excuse not to go into any deal with Labour.

  • Eddie Sammon 29th Apr '15 - 10:51pm

    I’ve developed a new red line: coalition with Labour. If the left of the party is ruling out a deal with the Tories then that has to be the response.

    Regards

  • Yay! More money going to the middle to upper income deciles of the household income distribution! Paid for, presumably, by benefit cuts? Or are we to slash government spending to pay for instead?

  • Tony Greaves

    “This is the most ridiculous, dishonest and generally depressing election campaign in my lifetime”

    Got to agree there, it is like they are all see an unstable parliament as the only option so are banking on another General Election in a few months time where they can un-promise all these things.

    “From all parties. Anyone who thinks you can make pledges, red lines, promises, anything else on the economy for five years ahead is either living in cloud cuckoo land or not being honest. Or both.”

    How the hell the Lib Dem leadership didn’t learn from last time where they made a “pledge” and got burnt. As for the others I can only assume they have been envious of the kicking Clegg has received on a regular basis over the “pledge.” I can’t imagine what motivates these numpties (on all fronts) to behave this way.

  • The Lib Dems shouldn’t even be using the word coalition at this stage, much less announcing preconditions.

  • Tony Greaves is right, but Clegg’s tactic today pales into insignificance with Cameron’s. The Party of Law and Order has made a mockery of the law.

    A government need not and so must not make a law to restrict its own tax regime. It has only to decide what that regime should be.

    When tax needs to go up, normal government puts tax up. Cameron government henceforth has decided that it will repeal its own legisation whenver it needs to put taxes up. Every government sometimes needs to put taxes up. As Cameron did with VAT.

  • John Barrett 30th Apr '15 - 12:25am

    It now looks like the next Government will be led by a party with only about 35% of the popular vote. If it is the Conservative party they might well be kept in power by smaller parties with ever increasing demands, which at some point will be refused.

    If the largest party is the Labour party, the SNP will not vote it down, but will then demand more for Scotland than Labour are prepared to give.

    The end result may well be a second election within twelve months, where many of the smaller parties are wiped out and a return to two party politics for many years to come.

  • I agree with Tony Greaves: the Dutch auction of spending promises, tax locks, deficit/stability commitments and red lines on all sides has descended into the realms of fantasy. I have no idea what the next Lib Dem red line will be, but we already know that it is only the front-page commitments that are likely to be deal-breakers in any coalition negotiations. On that basis, this personal allowance red line is unsurprising, as Caron says. I can’t see it being an obstacle to a deal with the Tories since they have the same policy in their manifesto. I suspect it would meet more resistance from Ed Balls, who has an aversion to tax cuts as a means if helping the lower-paid and is already planning a raft of tax rises on the better-off so would have trouble funding the higher PA.

  • Once the election is over, the posturing stops. Then many red lines will turn out to be pale rose and full of holes, and many discussions that were once unthinkable suddenly will become natural. Do not judge the likely outcomes based on what parties (or their leaders) are saying today; ask yourself what is in the parties’ short- and long-term interests.

  • Stephen Hesketh 30th Apr '15 - 5:46am

    David-1 29th Apr ’15 – 11:47pm
    “The Lib Dems shouldn’t even be using the word coalition at this stage, much less announcing preconditions.”

    Totally agree with both this and Tony Greaves’ comments. Clearly the latest smart, media SpAd, idea for keeping leaders in the public eye and looking Presidential (which is one of the reasons for elections becoming ever more depressing). The problem is that almost every one in the country sees them for what they are – resulting in yet another downward turn in the public’s trust of politicians.

  • Matthew Huntbach 30th Apr '15 - 6:01am

    I have been out of the country this week and so not able to follow the election properly, but I am sorry to see from what I read here that nothing seems to have changed. As I’ve said many times before, I accept that raising income tax allowance is a more equitable change in tax than what the Tories would like, so if it’s done as part of a compromise “we’ll accept your tax-cutting agenda, so long as you cut taxes in the way we prefer”, that’s fine. However, I don’t accept the way this has been shifted so that now rather than being a compromise to suit the situation, it was made out that tax-cutting of this form was what we as a party are all about in the first place, and the twisting of the truth over what was in our 2010 manifesto when it set out very clearly that raising the income tax allowance was part of a unified tax policy which was about moving where taxes fall and not about overall tax reduction. We used to be the party which said “A penny on tax for education” and people understood that and respected us for it, because they could see it showed we were realistic, we accepted that if you want better state services, you have to pay for them, and yes that does require higher taxes.

    Pushing out the idea that taxes can be cut without spelling out the consequences is so damaging in the long term. It paints us into a corner where either we have to break that impression, or push further and damaging cuts in services. The Conservatives may wave their hands and suggest that there are forever “efficiency savings” that can be made, but the reality is that there aren’t. We have long gone past when the easy ones could be made. Now it is so often the case that supposed efficiency savings work out for costly in the long run, with supposed efficiency savings in the past, such as passing out work to PFIs because “private sector know-how” would save money, now causing more expense. Or, as another example when last year’s efficiency saving was to centralise because economy of scale would enable savings, and this year’s is to decentralise because small scale local knowledge would enable savings, or the other way round. This idea that there is always some restructuring that can be one to save money – never mind the details, we’ll leave it to those on the ground to find them out – is nonsense. We just end up wasting more money on the overhead of restructuring. Which is what many of us said on the NHS during the coalition, and were ignored by our Leader and those surrounding him.

    Of course if there are genuine efficiency savings that can be made, I wouldn’t want to stop them. But just to claim there are, and then hope you, or someone below you, can find them when it comes to it, and to trumpet a claim that you will make tax-cutting a pledge or red-line or whatever is just poor politics. Whatever votes it may save or win in the short term will be lost in the consequent disgust in the long term.

  • Matthew Huntbach 30th Apr '15 - 6:18am

    Setting “red lines” in itself is such a wrong thing for our party to do now because it reminds people of the past red line or pledge. We are getting hammered for breaking a particular pledge, and also for that other pledge written into the Coalition Agreement which was blatantly ignored. So why should anyone take seriously any “red line” we put up now? Far better to make clear that while we may have policy directions we want to go in, so we can express our desires, we are always going to have to deal with the situation as it is, the future is never that predictable, and since we are unlikely to be forming a government on our own, it will always depend on what the other would accept.

    When the current “red lines” are set out, that makes it all the more difficult to defend the compromises we have made in the coalition. I have spent much of the last 5 years defending the party on its position on tuition fees, arguing that it was a necessary compromise which had to be agreed to because the other coalition partner just would not agree to what was necessary to meet the original pledge. My defence is undermined when new “red lines” are put in place. If we can make all these things “red lines” then why couldn’t we have kept to the red line pledge of last time? I’ve argued again and again against the “nah nah nah nah nah”s who claim that the Liberal Democrats could have got whatever they wanted by making it a red line last time, saying those people are being unrealistic. But after what I see here, I maybe conclude that perhaps I am wrong and the “nah nah nah nah nah”s are right. I am the fool who has been misled by propaganda coming from the top, by too much trust in the good will of the leadership, and actually yes we could have made tuition fees a red line – that is what I conclude when I see red lines drawn here and there now.

    I had really hoped that by this stage something would have developed so that I could feel happy enough to come out and give public support to the party in this general election as I have in every other general election since I first was old enough to vote. I am so, so, sorry that this is not the case. I have already explained this to my local party when they have sent me messages about the campaign. Sorry, don’t bother asking me, I’m not doing anything this time.

  • Julian Dean 30th Apr '15 - 7:34am

    What will offset this increase, another VAT increase, VAT on food or clothes; unfortunately it will be something.

  • Stephen Hesketh 30th Apr '15 - 8:02am

    John Roffey30th Apr ’15 – 7:08am

    The only good thing with respect to damage to ourselves is that they’re all at it.

    Someone should take a serious look at the political diversity of the individuals who are agreeing on this point. I think it very unlikely that we’re all wrong.

  • John Roffey 30th Apr '15 - 8:44am

    Stephen Hesketh 30th Apr ’15 – 8:02am

    As you know Stephen – I suspect that TTIP, which is expected to be approved during the lifetime of the next parliament, is the underlying cause of the extreme measures being taken during this election – certainly for those who support corporatism.

    Should an agreement be ratified that does place corporate lawyers above national governments – it would be very difficult to reverse. We know from the policies that Osborne has introduced that he is very supportive of the global corporations – no doubt that Cameron’s backers [with NC’s help] would like him to be a member of the EU Council of Ministers in order to influence the decisions during the ratification process.

  • The only red lines that will matter are those of the SNP and Labour. Labour have managed to go through this election attacking the coalition but being pretty unspecific as to what they would do and how to pay for it. But this doesnt really matter because the SNP will say to Labour no cuts ,chuck out bedroom tax,improve the programme of devolution take an extreme left turn and you can have the prime ministership.The sticking point would be trident but now helpfully ex Chief of Staffs are lining up behind Lib Dem view of 3 submarines, Labour can offer this SNP claim partial victory and the cuddling can begin

  • @Stephen Hesketh I disagree with the concept of red lines. They should be Orange.

  • “The stability budget does that but the tax allowance is something that every worker or pensioner will see the benefit of in their pay packets.”

    This is not true Caron. It won’t do anything for a lot of minimum wage, part time workers who will see nothing. Whilst someone on £23-28k gets a tax cut. That’s not a fairer society.

  • TCO 30th Apr ’15 – 10:04am
    @Stephen Hesketh I disagree with the concept of red lines. They should be Orange.

    ‘Blurred’ Tory Central Office – I thought you had stopped posting here – or has your replacement been detained?

  • @John Roffey I didn’t have you down as one of the horsemen!

    What do you think is more likely – that I’m a paid CCO staffer or that I’m a party member?

  • This is madness. As McMillan told the Telegraph reporter, his most difficult problems were “Events dear boy, events”. You simply cannot make pledges of this sort. The campaign has gone on too too long and is causing all this nonsense,. No-one can say what the world will be like next week, let alone next year or in 2020. This is one of the outcomes of having a Fixed term Parliament and a hungry media. It creates a longer and longer election period during which parties think they have to keep coming up with something new. As Tony Greaves says, most depresssing, because it is dishonest.

  • My personal Red Line is anything that threatens to break up The UK, that would include the proposed Refendum on Europe & a 2nd Scottish Referendum.

  • :@Paul Barker

    The sensible conclusion to that is no coalition with the Tories as they are the only ones who are proposing an EU referendum.
    The SNP will not get the support it needs from Labour or the Liberal Democrats for another Scottish Referendum, so there is no chance of that happening with Labour in either a Majority Government, Coalition Government or indeed a Minority Government.
    Not entirely sure the same could be said about the Tories as lot of them would have liked to have seen the back of Scotland for good.

  • theakes

    “This is one of the outcomes of having a Fixed term Parliament and a hungry media. It creates a longer and longer election period during which parties think they have to keep coming up with something new.”

    I see it differently, it appears to create a game of political “chicken” where the best answer is to be the most credible possible and set out a vision. The chicken is the one who diverts from a constant credible message in responce to media claims they are “boring,” by this standard all parties have lost.

  • David Allen 30th Apr '15 - 4:40pm

    I wish I could believe that Psi was right – that those making the most incredible claims will lose by doing so. Sadly I expect the opposite is true – The election will be won by the biggest bullshiner.

    90% of the public are not stupid enough to believe any of the crazy promises. Their votes will therefore be unaffected by what the bullshiners say.

    10% of the public are stupid enough to pay some attention to the bullshine. They are, it follows, going to be fooled by the bullshine. The race will be won by the politician who can successfully talk bullshine which wins over the stupid vote. Step forward, David Cameron.

    Ed Miliband is the nearest thing to honesty in this campaign (and to be fair, this known “Clegg-hater” would place Clegg second in that contest.) Ed Miliband told Russell Brand’s fans, quite reasonably, that he didn’t expect anybody to be euphoric about a Labour government. He is merely showing that he can do a bit better than the present shower. Will that piece of relative honesty win over the stupid voters? I doubt it.

  • @John Barrett “It now looks like the next Government will be led by a party with only about 35% of the popular vote”

    In 2005 Labour got a 21 seat majority with 35.2% of the popular vote. Being unable to command a majority on that vote share does represent some sort of progress I suppose.

  • Passingthrough 30th Apr '15 - 7:45pm

    @TCO “In 2005 Labour got a 21 seat majority with 35.2% of the popular vote.”

    I think you’ll find that gave them a majority of 67.

    It was the Conservatives in ’92 who got a 21 seat majority from 41.9% of the vote and from that they only managed to limp over the finish line in ’97 with the support of the Ulster Unionists. Meaning it has been 28 years since the “Natural Party of Government” have managed to win an outright workable, full-term proof, majority in the HoC.

  • David Allen

    I probably wasn’t clear I don’t think any one will “lose” by doing this (other thandemocracy,voters etc.) I ment it has shown them all to be “loosers” as they have all blinked.

  • @Passing through FPTP does them no favours any more.

  • Alex Sabine 1st May '15 - 1:03am

    The Tories’ shock 1992 result does look remarkable from today’s perspective. In recession conditions a vote share of 42% and a record tally of 14.1 million votes, partly reflecting the high turnout of 78%. (No party has managed more than 10.7 million since 1997.) Of course Passingthrough is right to say that they haven’t come close to repeating that performance since.

    I guess a big question hovering over this election is whether there will be any parallels with 1992: I’m assuming the polls are more reliable, but we can’t be sure and there is likely to be an exceptionally large number of seats hinging on fewer than 1,000 votes.

  • paul barker 30th Apr ’15 – 11:42am
    “My personal Red Line is anything that threatens to break up The UK…”

    So you would be perfectly happy joining with the DUP — that would be their top priority Red Line as well. 🙂

  • Matthew Huntbach
    “Pushing out the idea that taxes can be cut without spelling out the consequences is so damaging in the long term.”

    I agree it is like the LibDem Leadership have learn nothing. If all you do is to generate primises that you can “technically keep” you will simply make the voters feel like they have been duped. Companies that sell products spend a lot of time considering the customer expectations. VW don’t try and tell you that their cars are the best (fastest/most luxurious/highest status) on the market they focus on convincing its customers that their cars are really good when considering the price.

    Modern political parties are all claiming to sell Ferrari’s at Kia prices, there is no way this ends well.

    “I have spent much of the last 5 years defending the party on its position on tuition fees, arguing that it was a necessary compromise which had to be agreed to because the other coalition partner just would not agree to what was necessary to meet the original pledge.”

    Which is the truth, even though the pledge was a bad idea (as has been done to death elsewhere).

    “My defence is undermined when new “red lines” are put in place. If we can make all these things “red lines” then why couldn’t we have kept to the red line pledge of last time? I’ve argued again and again against the “nah nah nah nah nah”s who claim that the Liberal Democrats could have got whatever they wanted by making it a red line last time, saying those people are being unrealistic. But after what I see here, I maybe conclude that perhaps I am wrong and the “nah nah nah nah nah”s are right. I am the fool who has been misled by propaganda coming from the top, by too much trust in the good will of the leadership, and actually yes we could have made tuition fees a red line – that is what I conclude when I see red lines drawn here and there now.”

    The issue is that most of the “red lines” are simply things that they know will be agreed to, the tax threshold is one that the Tories want and Labour would be happy with as well.

  • Alex, the 1992 election was a magnificent example of a disreputable, self serving but ruthlessly well organised political party, finding a way to draw a line under its past and reinvent itself as Not the Party of Margaret Thatcher in order to wipe the slate clean and make a new start. Of course the new start didn’t go so far as to clean out its own Augean stables of corruption and cronyism (parliamentary expenses) and the wheels finally came off five years later.

    If the Lib Dems had taken their chance last May, it would have been going into this election much higher in the polls than it is now, having spent a year detoxifying itself from the self inflicted disasters of the previous four years. Ex members would have flocked back to support a new leader and a new found confidence would have been apparent. Instead we see meltdown in Scotland, near collapse in Devon and Cornwall, and the loss of almost every Labour facing MP and councillor in the country. We now have the usual clutching at straws and people rewriting their advice of the last four years to pretend that things can be put right and that they were not responsible for the party sleepwalking to disaster, accompanied by a desperate scramble to save a few seats wherever.

    Ultimately every one of those senior MPs who ran away and hid after last May rather than take a stand to save the party will have to answer to themselves why they did so.

  • John Roffey 1st May '15 - 5:47pm

    Oldliberal 1st May ’15 – 5:36pm

    “Ultimately every one of those senior MPs who ran away and hid after last May rather than take a stand to save the party will have to answer to themselves why they did so.”

    I hope this is true – but it does assume that saving the Party is seen as a higher priority than personal ambition!

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