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Liberal Democrats in Blackburn, Darwen, Hyndburn and RossendaleCovering the Parliamentary Constituencies of (a) Rossendale & Darwen (b) Blackburn (c) Hyndburn |
Clegg pushes for further tax cuts for the low paid
January 26, 2012 9:23 AM
Deputy Prime Minister, Nick Clegg MP
Nick Clegg is pushing the coalition government to go "further and faster" in raising the pay level at which people start paying income tax to £10,000 a year.
The deputy prime minister will argue that many families are at financial "boiling point" and need more relief.
The coalition has promised to raise the income tax threshold to £10,000 by the next election, set for 2015.
Labour said Mr Clegg had "a cheek preaching about fairness and tax".
The deputy PM's speech to the Resolution Foundation in London follows official figures showing the economy shrank by 0.2% in the final quarter of 2011.
It also comes ahead of the Budget on 21 March, increasing speculation that changes to tax thresholds could be announced.
Left vs right
Mr Clegg will aim to set out a distinctive Liberal Democrat fiscal position by highlighting differences with the party's Conservative coalition partners.
He will say that those on the right in politics place "less of an emphasis on using the tax system to create greater equality".
He will also attack Labour by saying the "traditional left" supports a "penal rate on the highest earners, simply because it makes them poorer".
At the last election, the Lib Dems pledged to raise the income tax threshold to £10,000 a year and the coalition agreed to implement this policy over the course of this Parliament.
The income tax threshold was raised by £1,000 to £7,475 in the 2010 Budget, and the government plans to increase it further to £8,105 this year.
But Mr Clegg is expected to say: "Today I want to make clear that I want the coalition to go further and faster in delivering the full £10,000 allowance, because the pressure on family finances is reaching boiling point.
"These families have seen their earnings in relative decline for a decade, compared to those at the top. That has accelerated since 2008, with lower real wages and fewer hours at work."
He will argue that the coalition has raised capital gains tax and reduced tax breaks on pension funds "for the very rich", while "clamping down" on tax avoiders to raise an extra £7bn a year.
Mr Clegg will also reiterate his commitment to the coalition's aim of ending the UK's deficit, but will promise to do so "in a way that is fair".
"People look to the Liberal Democrats to keep this coalition anchored in the centre ground. They want economic competence, but they want compassion too.
"It is our job to make sure this government delivers both."
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