Cameron: People 'deserve tax cuts'

Written By Unknown on Senin, 26 Januari 2015 | 19.21

26 January 2015 Last updated at 11:59

David Cameron has said there is an "economic, moral and practical" case for lower taxes as he set out his central election pledges on taxation.

The prime minister said, under his plans, no-one would pay tax on the first £12,500 of their income by 2020.

In a speech in Hampshire, he said this would represent a country "thoroughly in favour of work and effort".

But the Lib Dems insist they have been the drivers of tax cuts since 2010 and had "fought tooth and nail" for them.

The coalition has increased the point at which people start paying income tax - known as the annual personal allowance - from £6,475 in 2010-2011 to £10,500 in 2014-15, meaning all those earning less than £100,000 now pay no tax on the first £10,500 of income.

Both the Conservatives and Lib Dems have pledged to lift this threshold to £12,500 during the next Parliament although the two parties are at odds over who has championed the policy, with both seeking to take the credit.

'People's money'

In the third of a series of speeches setting out the Conservatives' main electoral themes, the prime minister said his party was on the side of taxpayers, who he acknowledged have endured a "difficult time" since the 2008 recession.

"We should start from the proposition that it is people's money not government's money and we should leave them with as much to spend as we can rather than frittering it away on wasteful government projects," he said.

Under Conservative plans, he said no-one on the minimum wage working 30 hours a week would pay income tax by 2020, effectively taking one million people out of tax completely.

"This is not just a vague promise," he said. "We have a record."

Changes to the personal allowance since 2010, he said, had delivered a £700 tax cut for 24 million people and three million people were no longer paying income tax as a result.

Mr Cameron also repeated the party's pledge - first made at its autumn conference - to help middle earners by raising the income threshold at which people start paying 40% tax from £41,900 at the moment to £50,000 by 2020, saying this "backed aspiration".

"Those who can afford to" would continue to "pay the most in tax", he added.

"We make these commitments on the basis of the fact that we have turned round the economic performance of this country," he said.

The Conservatives have said they can eliminate the structural deficit and return the UK's public finances to the black over the next five years without raising taxes.

Asked whether the tax cuts were designed to shore up Conservative support in southern England in the face of the threat from UKIP, he said "on their own they are never enough" and "what you need is an economic plan that people can see is working".

'Lib Dem flagship'

Danny Alexander, the Lib Dem Chief Secretary to the Treasury, said the Conservatives had dismissed income tax cuts as "unaffordable" during the last election and it was only the Lib Dems' persistence which had brought them about.

The party has said, if it remains in government, it will raise the personal allowance to £11,000 in 2016.

"Our Liberal Democrat flagship policy of dramatically increasing the amount that people can earn before they pay income tax amounts to the greatest revolution in the tax landscape for working people in living memory," Mr Alexander said.

"Nick Clegg and I have fought tooth and nail to keep the successive rises in the personal allowance on the table at every Budget."

Labour have accused the Conservatives of making £7bn of unfunded tax promises and said they broke a 2010 election promise by raising VAT shortly after the election.

The opposition say their own plans to raise the top level of tax from 45p to 50p are part of a fairer approach to ensuring a budget surplus by 2020.

The Taxpayers Alliance campaign group said Mr Cameron's tax commitments were welcome but were "not as generous as they first seem".

"He is not planning to raise the 40p threshold quickly enough to keep pace with inflation and he has said nothing about what he would do with national insurance which is a second income tax in all but name," said its director Jonathan Isaby.


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