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Nick Clegg calls for “workers’ bonus” to put £100 back in people’s pockets

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Clegg Speech
There have been rumours for a while about Nick Clegg being very keen to find a way to help those struggling with rising living costs. Today he announces that he’s pushing for the Coalition to raise the tax threshold to £10,500 in April 2015, exceeding the manifesto promise that Liberal Democrats made in 2010.

From Scotland on Sunday:

Sources close to Clegg said last night that the increase in the personal allowance – which has gone up from £6,475 in 2010 to £10,000 by 2014-15 – was the Lib Dems’ “signature tune” in the coalition pact. “It was always our intention to get to the £10,000 and a £700 tax cut, but we believe the economic recovery allows us to put even more money back in people’s pockets. Because the economy is recovering, we want to reward people with a workers’ bonus,” the source said.

The extra tax cut would have to be paid for from current spending limits, the source added. “We know that we are on to a vote winner here. 
The Tories once said this ­policy wasn’t affordable, but now they like to claim credit for it.”.

Clegg is expected to argue that the increase is a “reward” for people who have accepted below-average pay rises or flexible working hours to stay in work during the hard times.

Three quick thoughts from me:

This idea is both a good practical idea and serves to remind people whose idea the tax threshold rise was in the first place. The Tories have been falling over themselves to take credit for something that David Cameron dismissed so casually during the leaders’ debates in 2010. The “workers’ bonus” will provide much needed help with the rising cost of living and show clearly one of the key things that the Liberal Democrats have brought to the Government. And it certainly makes it very difficult for George Osborne to say no.

However, this will automatically diminish what we put in the manifesto. For the 2015-20 parliament, our policy so far is that we raise the tax threshold to the level of the National Minimum Wage. If we do 20% of that before the election, we surely need to replace it in the manifesto, which should also contain many more measures to help those on the lowest income.

Speaking of whom, this doesn’t reward any worker who earns less than £10,500. They aren’t going to get any extra cash and it’s quite possible that they need it most. Serious thought needs to go in to working out how to help those people, particularly where their income is the only one in the house.

Nick Clegg will be on Andrew Marr very soon, so we will let you know what he has to say.

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


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