DAVID Cameron’s attempt to put tax at the heart of his general election campaign has provoked a row with his Liberal Democrat coalition partners, as Nick Clegg accused the Prime Minister of a “brazen attempt” to steal the credit for income tax cuts during this parliament.
And Labour accused the Prime Minister of failing to explain how he would pay for £7 billion worth of income tax cuts which the Conservatives have promised if they win in May.
In a campaign speech in Hampshire, Mr Cameron restated his pledge to raise the personal allowance threshold below which workers pay no income tax to £12,500 and to increase to £50,000 the level at which the 40p tax rate kicks in. He said there were economic, moral and practical justifications for cutting taxes, even at a time when £30bn cuts were required to government spending – including £12bn from welfare.
In response to critics who have said that the pledges are unfunded, Mr Cameron said: “How are we able to make them? Because we have a strong economy and because people can see the record of this government.
“Under this government, we’ve cut the deficit. We’ve had to make difficult decisions on spending to do that. But we have cut income tax at the same time and we can do it again in the next parliament.”
SCOTSMAN TABLET AND MOBILE APPS
Mr Cameron said that more than three million workers had been taken out of income tax altogether by the government’s decision to increase the personal allowance from £6,475 to £10,600 over the course of this parliament, and the planned move to £12,500 would take another million out. Meanwhile, raising the 40p threshold to £50,000 would take 800,000 people earning over £42,000 out of the upper rate.
But Mr Clegg said that increasing the personal allowance was a Lib Dem policy which Mr Cameron had opposed at the 2010 election and which had been implemented only because Lib Dem ministers in the coalition insisted on it. He accused Conservative ministers of “looking after their own kind” by prioritising tax cuts for married couples or for shareholders who give up employment rights.
As Mr Cameron delivered his speech, the Lib Dems released a video on Twitter showing the Tory leader telling Mr Clegg during one of the 2010 leaders’ TV debates that an increase in the personal allowance would be unaffordable.
“I think this is a pretty brazen attempt by the Conservatives, which everyone will see through, to take the credit for a very important policy which has only been delivered in government because of the Liberal Democrats. said Mr Clegg,
Mr Cameron gave no details of the planned timetable for the new tax cuts, which Tory chief whip Michael Gove has previously suggested could be paid for from the budget surplus which Conservatives hope to achieve by 2019.
Labour cited research by the Institute for Fiscal Studies which found that tax and benefit changes under the coalition had left households an average £1,127 a year worse off, as increases in VAT and cuts to tax credits more than outweighed the impact of the personal allowance rise.
“David Cameron is now desperately making £7bn of unfunded tax promises,” said Labour Treasury spokesman Chris Leslie. “He needs to come clean about whether these would be paid for by another VAT rise, even deeper spending cuts or both.”