The problem with Clegg's tax cut plan: it does nothing to help the poorest

The lowest-paid five million workers will not benefit from an increase in the income tax threshold to £10,500. Cutting VAT or National Insurance would be more progressive.

When the Lib Dems' plan to raise the income tax threshold to £10,000 by 2015 was discussed in the televised leaders' debates, David Cameron told Nick Clegg: "I would love to take everyone out of their first £10,000 of income tax, Nick...We cannot afford it." The PM has rather changed his tune since then. He now leads a government that will meet that pledge in April 2014, a year earlier than promised, and a party that lists its greatest achievement as "a tax cut for 24 million hardworking people".

With the £10,000 threshold due to take effect when the new tax year begins, there is room for the coalition to go further in the two Budgets that remain before May 2015. Today, in an attempt to reclaim ownership of the policy, Clegg has called on George Osborne to deliver a pre-election tax cut by increasing the allowance to £10,500 and delivering a "workers' bonus" (note the smart framing).

Interviewed on The Andrew Marr Show this morning, he boasted that his plan would mean "an extra £100 in everybody's pocket". Except, of course, it wouldn't. Raising the personal allowance will do nothing for the lowest-paid five million workers, all of whom earn less than £10,000, or the unemployed, the disabled and the retired. As the IFS has shown, those in the second-richest decile gain the most in cash terms from the policy (mainly due to the greater number of dual-earning households), followed by the richest tenth, who gain marginally less due to the gradual removal of the personal allowance after £100,000 (a brilliant piece of stealth redistribution by Alistair Darling). As a percentage of income, it is middle-earners who gain the most, with those at the bottom gaining the least.

Marr failed to challenge Clegg on this point, but Labour and other parties should. Progressive alternatives to raising the income tax threshold include increasing the National Insurance threshold, which currently stands at £7,748, or cutting VAT, which stands at a record 20 per cent and hits the poorest hardest. These policies might not be as politically attractive as a cut in income tax, but they will do more to get money where it is most needed.

Nick Clegg speaks at the Liberal Democrat conference in Glasgow earlier this year. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Twitter/@suttonnick
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From "cockroaches" to campaigns: how the UK press u-turned on the refugee crisis

Harrowing photos of a drowned toddler washed up on a Turkish beach have made the front pages – and changed the attitude of Britain's newspapers.

Contains distressing images.

The UK press has united in urging the government to soften its stance on the record numbers of people migrating to Europe. The reason? A series of distressing photos of the body of a three-year-old Syrian boy, face down in the sand on the Turkish coast.

Most papers decided to run one or more of these pictures on their front pages, accompanying headlines entreating David Cameron to take notice. While your mole wholeheartedly supports this message, it can't help noticing the sudden u-turn executed by certain newspapers on the subject of the refugee crisis.

First, they used to call them "foreigners" and "migrants" (a term that has rapidly lost its neutrality in the reporting of the crisis) who were flooding Europe and on the way to "swarm" the UK. Now they've discovered that these people are victims and refugees who need saving.


 

Photos: Twitter/suttonnick


The Sun went so far as to run a column by Katie Hopkins five months ago in which she referred to them as "cockroaches" and "feral humans". She wrote:

Show me pictures of coffins, show me bodies floating in water, play violins and show me skinny people looking sad. I still don't care. Because in the next minute you'll show me pictures of aggressive young men at Calais, spreading like norovirus on a cruise ship. Make no mistake, these migrants are like cockroaches.

Photo: Twitter

Now the same paper is urging the government not to "flinch" from taking in "desperate people", those in a "life-and-death struggle not of their own making":

Photo: Twitter/@Yorkskillerby


And the Daily Mail still seems confused:

 

It's not really the time for media navel-gazing, but perhaps the papers that have only just realised the refugees' plight can look closer at the language they've been using. It may have contributed to the "dehumanising" effect for which Cameron and co are now being condemned.

I'm a mole, innit.