Clegg calls for tax bonus

Deputy Prime Minister Nick Clegg will today call for a “workers’ bonus” £100 tax cut.

In what’s seen as a major hint about the contents of Chancellor George Osborne’s autumn budget Clegg will outline his wish to see the personal tax allowance the amount people earn before they start paying tax on their income raised to £10,500 before the end of this parliament.

That’s led many to believe that Osborne will announce the hike in his autumn budget next month with the tax cut scheduled to take effect in spring 2015, just before the General Election.

The Liberal Democrats called for the income tax threshold to be raised to £10,000 in their last election manifesto. Despite David Cameron rubbishing the policy during the TV debates Osborne hit the target at the last Budget.

The Lib Dems claim it adds up to a £700 tax cut for workers over the course of the parliament and increasing the limit by another £500 would slice a further £100 off the tax bills of 24 million basic rate taxpayers.

The policy would cost £1 billion but Mr Clegg’s enthusiasm for it is a sign of growing confidence in the Coalition that the economic recovery is under way.

Mr Clegg will announce the policy in his weekly ‘letter from the leader’ sent to Lib Dem members each week, writing: “Think of it as a workers’ bonus. The British people have lived with austerity for three years. This is your recovery, you deserve to feel the benefits.”

A source close to the Deputy Prime Minister said: “As Nick has said, cutting income tax for ordinary people is our signature tune in this Government and now we want to cut it further and faster.

“It was always our intention to get to the £10,000 and a £700 tax cut but we believe the recovery allows us to put even more back in people’s pockets.”