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Did the next coalition talks just start?

14 October 2013

The Tory talk of backing an increase (£) in the personal tax allowance to £12,500 serves several purposes. First, it makes it easier for the Tories to champion raising the rate to £10,000 and it gives them a tax cuts that’s aimed at low and middle income earners. But it also draws a neat dividing line with Labour, which is not keen on this policy, ahead of any future coalition negotiation.

Indeed, I understand that thinkers close to Miliband have urged Nick Clegg to drop his attachment to raising the income tax threshold and instead think about using the money for a big universal childcare offer.

Danny Alexander has already been out trying to retain Lib Dem ownership of this policy. If the Tories do match it, I suspect that the Liberal Democrat response will simply be to go even further. The Tories, though, have sent a message that they are open to one of the Liberal Democrats’ biggest post-2015 priorities.  It looks like we might need a new word in British politics for a pre-negotiation concession.

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  • itdoesntaddup

    The next coalition talks have been ongoing for some time. In fact, I imagine it has been a regular topic between Clegg and Cameron ever since this government was established. Cameron has eyes for nothing else.

  • Smithersjones2013

    [Yawn] Raising the income tax threshold has been UKIP policy since 2006 long before the idea of Nick Clegg being Libdem leader was even a twinkle in Libdem eyes. UKIP proposed at the last election to raise it to over £11k. Such an idea has been bouncing around Tory circles for just as long. The fact that Westminster Insiders like Forsyth allow the Libdems to dishonestly claim it when it was a no brainer for other parties to support is risible. IIRC Nigel Farage has already talked in terms of raising it to 12.5k or more I believe

    It was obvious there would be a bidding war over raising the Income tax threshold.

    As for the contrived link to a further coalition has Forsyth even bothered to consider the impact that proposing such a coalition let alone it coming to fruition might have on the two parties. How small do Cameron and Clegg want to make their parties? My estimate is a second coalition could halve both parties memberships again and likely condemn the Tories to near permanent sub 30% vote share figures and the Libdems permanently sub 10%.

    Beyond that this Westminster onanism with coalition is delusional. Chances of any coalition are minimal and the chances of another Con/ LD coalition are distinctly unlikely. It could well be that the sum of Conservative and Libdem MP’s might not be able to form a majority in 2015 even if by some fluke the Tories somehow stay the largest party. In the real world Labour are on course to win a majority at the next election and something quite sensational needs to happen (and there are no signs of it) to even come close to turning any other speculation into something more than deranged delusion.

  • toco10

    Even Labour’s BBC will find it difficult to put a negative spin on this one although it will certainly try particularly led by the mind clogged time servers on its Today programme who are only prepared to highlight negative stories to the detriment of this country.The point is lifting the threshold encourages everyone to work rather than sit at home and live on welfare paid for by hardworking taxpayers and pensioners.

    • Hello

      Their charter is up for review in 2016. It would be a pretty good argument for press freedom to do a proper stitch-up job.

    • Gareth

      Well the obvious disadvantage is that it will do nothing for anyone who earns less than £10,000. I fully supported raising the personal allowance to this level. But once someone has been ‘taken out of paying income tax’, further increases to the threshold will not affect what they will earn, and the policy becomes more of a tax cut for those on middle and high incomes. I’m not sure that sits quite as well with Osborne’s aim of balancing the budget.

  • Ian Eiloart

    Go further? How about making National Insurance and annual tax instead of a weekly tax. That would assist part time workers who get a bit of overtime now and again, and seasonal workers, and those who don’t have permanent jobs.

    And, raise the threshold in line with income tax.

    And, reduce the amount so that people in lower tax thresholds aren’t paying a HIGHER MARGINAL TAX RATE (when the employer’s contribution is counted) than those in higher thresholds.

  • Bring Back Free Speech

    Great,if it actually happens, but it’s always jam tomorrow with this lot, despite being supposedly in power. Also, they always insist on balancing tax cuts in one are with increases in another, as they seem incapable of doing the necessary in making decisive spending cuts. No decisive savings, no real tax cuts.

    • Ian Eiloart

      Well, it’s not jam tomorrow. The income tax threshold has already been raised from about 6k to nearly 10k.

      • Bring Back Free Speech

        What about inflation, and not content with fiscal drag, actually reducing the headline rate at which top rate starts? Top rate was meant to be a tax on the rich, like inheritance tax, and has been allowed to become a tax on hard-pressed middle – income people. Seeing how things are going, it will eventually become the rate most pay.
        Subject: Re: New comment posted on Did the next coalition talks just start?

        • Alexsandr

          yes the 40% band starts far too low. It should be about £60k

          • 2trueblue

            The coalition made a total mess of the childrens allowance levels and families where one parent lost part/all of it at £50k and yet both parents earning £98k get it. What a mess. I hope we do not get another coalition because we are in noddy land with no joined up thinking.

  • Russell

    A perfect reversal of what Brown & Co. did pre 2010 election with their 50% tax rate, introduce a £12500 personal allowance and a reduction of the benefit cap to the same level of £12500 (to pay for it), all starting in April 2015.
    If Labour win the election leave them up a gum tree.

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