Clegg gambles on a tax cut

Deputy PM calls for Osborne to accelerate introduction of a £10,000 personal allowance.

Nick Clegg's intervention this morning is possibly his boldest since entering government. With the economy on the brink of recession and family finances in "a state of emergency", the Deputy PM will use his speech to the Resolution Foundation to call for George Osborne to go "further and faster" in raising the income tax threshold to £10,000. While Osborne has pledged to reach the target by the end of the parliament (the personal allowance is due to rise from £7,475 to £8,105 this April), Clegg wants him to meet it now.

It's all part of the Lib Dems' differentiation strategy, with the Deputy PM championing a policy that, lest we forget, first appeared in his party's manifesto. And the stakes are high. Should Clegg succeed, he will have concrete proof of Lib Dem influence. Should he fail, he will be mocked for his impotence.

The Treasury has distanced itself from the proposal this morning, describing it as an expression of Lib Dem priorities, not government policy. But Tory MPs, many of whom felt the pledge should have appeared in the Conservative manifesto, have reacted more favourably. Zac Goldsmith, Gavin Barwell and Justin Tomlinson have all posted supportive tweets.

But it's not hard to see why those directly responsible for the nation's finances are more sceptical. For one thing, with Osborne averse to "unfunded tax cuts", where would the money come from? The Tories have already vetoed Clegg's preferred option - a mansion tax - and are unlikely to accept demands for further green taxes, another possibility floated by the Lib Dems. More promising, perhaps, is Clegg's call for measures to close stamp duty loopholes and clamp down on tax avoidance but would these raise enough? By most estimates, the policy would cost around £11.5bn per year.

Nor can Clegg expect much support from Labour, which rightly argues that a VAT cut would be a more effective stimulus. Too many taxpayers will simply bank the money they save and the policy will do nothing for the three million households that earn too little to pay income tax, including many pensioners and part-time workers.

But the Deputy PM's intervention is at least evidence that some in government realise that it must depart from the script. As real incomes are continually squeezed, the state must act to relieve the burden.

George Eaton is political editor of the New Statesman.

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Voters are turning against Brexit but the Lib Dems aren't benefiting

Labour's pro-Brexit stance is not preventing it from winning the support of Remainers. Will that change?

More than a year after the UK voted for Brexit, there has been little sign of buyer's remorse. The public, including around a third of Remainers, are largely of the view that the government should "get on with it".

But as real wages are squeezed (owing to the Brexit-linked inflationary spike) there are tentative signs that the mood is changing. In the event of a second referendum, an Opinium/Observer poll found, 47 per cent would vote Remain, compared to 44 per cent for Leave. Support for a repeat vote is also increasing. Forty one per cent of the public now favour a second referendum (with 48 per cent opposed), compared to 33 per cent last December. 

The Liberal Democrats have made halting Brexit their raison d'être. But as public opinion turns, there is no sign they are benefiting. Since the election, Vince Cable's party has yet to exceed single figures in the polls, scoring a lowly 6 per cent in the Opinium survey (down from 7.4 per cent at the election). 

What accounts for this disparity? After their near-extinction in 2015, the Lib Dems remain either toxic or irrelevant to many voters. Labour, by contrast, despite its pro-Brexit stance, has hoovered up Remainers (55 per cent back Jeremy Corbyn's party). 

In some cases, this reflects voters' other priorities. Remainers are prepared to support Labour on account of the party's stances on austerity, housing and education. Corbyn, meanwhile, is a eurosceptic whose internationalism and pro-migration reputation endear him to EU supporters. Other Remainers rewarded Labour MPs who voted against Article 50, rebelling against the leadership's stance. 

But the trend also partly reflects ignorance. By saying little on the subject of Brexit, Corbyn and Labour allowed Remainers to assume the best. Though there is little evidence that voters will abandon Corbyn over his EU stance, the potential exists.

For this reason, the proposal of a new party will continue to recur. By challenging Labour over Brexit, without the toxicity of Lib Dems, it would sharpen the choice before voters. Though it would not win an election, a new party could force Corbyn to soften his stance on Brexit or to offer a second referendum (mirroring Ukip's effect on the Conservatives).

The greatest problem for the project is that it lacks support where it counts: among MPs. For reasons of tribalism and strategy, there is no emergent "Gang of Four" ready to helm a new party. In the absence of a new convulsion, the UK may turn against Brexit without the anti-Brexiteers benefiting. 

George Eaton is political editor of the New Statesman.