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.

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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.