David Cameron and Nick Clegg hold a press conference on anti-terror laws at No.10 Downing Street on 10 July, 2014. Photograph: Getty Images.
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The Lib Dems steal a march on the Tories by pledging to cut National Insurance

Nick Clegg has pre-empted an expected Tory manifesto commitment. 

When the Lib Dems pledged to raise the income tax threshold to £10,000 in their 2010 general election manifesto many Tories questioned why they hadn't got their first. The answer was provided by David Cameron during the first TV leaders' debate: "I would love to take everyone out of their first £10,000 of income tax, Nick. It's a beautiful idea, it's a lovely idea - we cannot afford it." 

It turned out, though, that we could. The policy was included in the Coalition Agreement and the Tories, with some chutzpah, now present it as their greatest achievement in government. In his most recent Budget, George Osborne announced that the threshold would rise to £10,500 next year, exceeding Clegg's original target. 

The Lib Dems, however, have long made it clear that they want to go further by increasing the personal allowance to £12,500 by the end of the next parliament. Labour, meanwhile, has pledged to reinstate the 10p tax rate (a policy championed by Tory MP Robert Halfon) disastrously abolished by Gordon Brown in his final Budget in 2007. 

These announcements have left the Tories, many of whom, like Milton Friedman, are in favour of cutting taxes "under any circumstances and for any excuse", asking what their offer will be. One policy long rumoured for inclusion in the party's manifesto is a cut in the National Insurance threshold. At present, this stands at £7,956, far below the income tax threshold of £10,000. Cutting NI would ensure that the 1.2 million workers who earn too little to gain from another increase in the personal allowance (or from a 10p tax rate) would benefit. The Tories, still viewed as "the party of the rich", would be able to boast of a tax policy more progressive than that of their rivals. 

But as in 2010, the Lib Dems have got there first. Danny Alexander announced today that after achieving a personal allowance of £12,500, the party would "seek to raise the level that people start paying employee National Insurance". He added: "The Liberal Democrats are the only party in British politics with a long-term commitment to cutting taxes for the working people of Britain. We've delivered the largest programme of tax cuts for a generation over the last four years, despite all of the other financial pressures.

"These manifesto commitments will mean nothing less than a generational shift to a fairer tax system that rewards work and helps working people. That's the way to build a stronger economy and a fairer society and ensure that everyone has the opportunity to get on in life."

It sounds good, but the Chief Secretary to the Treasury notably avoided the question of how the move would be paid for. With the IFS warning that the next government will need to raise taxes (or cut welfare) by £12bn merely to keep departmental spending cuts at their current pace, all parties should be more focused on raising money than giving it away.

But nine months away from a general election, politics is trumping policy. That means the pressure is now on Cameron to deliver a conference-dazzling tax cut pledge this autumn. How he will do that while pledging to eliminate the deficit by the end of the next parliament, and to avoid any further tax rises, is another question

George Eaton is political editor of the New Statesman.

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Sadiq Khan gives Jeremy Corbyn's supporters a lesson on power

The London mayor doused the Labour conference with cold electoral truths. 

There was just one message that Sadiq Khan wanted Labour to take from his conference speech: we need to be “in power”. The party’s most senior elected politician hammered this theme as relentlessly as his “son of a bus driver” line. His obsessive emphasis on “power” (used 38 times) showed how far he fears his party is from office and how misguided he believes Jeremy Corbyn’s supporters are.

Khan arrived on stage to a presidential-style video lauding his mayoral victory (a privilege normally reserved for the leader). But rather than delivering a self-congratulatory speech, he doused the conference with cold electoral truths. With the biggest personal mandate of any British politician in history, he was uniquely placed to do so.

“Labour is not in power in the place that we can have the biggest impact on our country: in parliament,” he lamented. It was a stern rebuke to those who regard the street, rather than the ballot box, as the principal vehicle of change.

Corbyn was mentioned just once, as Khan, who endorsed Owen Smith, acknowledged that “the leadership of our party has now been decided” (“I congratulate Jeremy on his clear victory”). But he was a ghostly presence for the rest of the speech, with Khan declaring “Labour out of power will never ever be good enough”. Though Corbyn joined the standing ovation at the end, he sat motionless during several of the applause lines.

If Khan’s “power” message was the stick, his policy programme was the carrot. Only in office, he said, could Labour tackle the housing crisis, air pollution, gender inequality and hate crime. He spoke hopefully of "winning the mayoral elections next year in Liverpool, Manchester and Birmingham", providing further models of campaigning success. 

Khan peroration was his most daring passage: “It’s time to put Labour back in power. It's time for a Labour government. A Labour Prime Minister in Downing Street. A Labour Cabinet. Labour values put into action.” The mayor has already stated that he does not believe Corbyn can fulfil this duty. The question left hanging was whether it would fall to Khan himself to answer the call. If, as he fears, Labour drifts ever further from power, his lustre will only grow.

George Eaton is political editor of the New Statesman.