“The typical working taxpayer will be over £900 a year better off!” George Osborne bellowed during his final budget before the election.
He was laying the foundations for one of the Tories’ key 2015 manifesto promises: raising the income tax threshold to £12,500, meaning those working full-time on minimum wage won’t pay any income tax. This follows rises in the tax-free personal allowance that began at the coalition’s birth in 2010.
But, as is often said, behind every wildly grinning Chancellor is a woman who works for a water company. Because the new Tory government’s flagship tax policy wouldn’t exist if it weren’t for Elizabeth Jewkes, an ordinary mother-of-four who lives just outside Chester.
A Lib Dem member – she joined the party at the age of 27, in 1984 – Jewkes came up with the tax policy that the Tories were so keen to appropriate from their coalition partners.
Her story is an illustration of how much power regular Lib Dem members have to influence party policy.
“Next thing I know, Nick Clegg’s announcing it”
She was in the auditorium during Nick Clegg’s first conference as leader of the party, in 2008. He mooted that £20bn of savings could be spent on reducing the rate of standard income tax.
“We all duly voted for this,” Jewkes explains. But discussing Clegg’s idea with a friend and fellow party member, Jewkes concluded they should be using those savings to raise the income tax threshold instead.
“It’s like a lightbulb went on,” she says.
Later that year, when Vince Cable – then the Lib Dems’ Treasury spokesperson – visited a regional conference Jewkes was also attending, she ran her idea past him. “He came as a keynote speaker and I just nobbled him when he was having a cup of tea,” she laughs.
“I said to him, ‘is there any reason we don’t do this?’ and he said to me, ‘ah, that’s my ultimate dream.’”
Jewkes wrote her idea up as a policy motion and submitted it to party conference in the summer of 2009. The party didn’t even wait until that conference to announce it.
“The next thing I know, Nick is on the news saying, ‘we have a new tax policy – first £10,000 tax-free’ And I thought ‘hold on a minute…’” says Jewkes of first discovering her policy had been taken on.
“I was just completely astonished,” she recalls. Yet she still never imagined it would become government policy.
“Now I’m slightly annoyed”
When the Lib Dems entered government with the Tories, did she think it would mean goodbye to her proposal?
“Yeah,” she replies. “I thought that was the end. I didn’t think the Tories would go for that . . . And it turned out they absolutely love it.”
And sure enough, in an event that “stunned” Jewkes, Osborne announced in his emergency summer budget of 2010 the first step of a policy David Cameron had recently dismissed as a “beautiful idea we just cannot afford”.
Much to the Lib Dems’ frustration, Cameron attempted throughout the last parliament to take the credit for the policy. How does Jewkes feel about the Tories nicking it?
“Well, I’m kind of flattered really. And I’m slightly annoyed,” she replies. “Because Tories will quite happily tell you it’s a Tory policy, and it never was. Although it is now; they’re committing to raising it to the level of minimum wage, aren’t they? Which is funny, because that was my original idea!”
(According to the IFS, the Lib Dem-turned-Tory policy to increase the personal allowance to £12,500 by 2020-21 will cost around £4bn a year.)
- Read more about our special party membership-themed week here.
- Now read Tim Wigmore on why raising the personal tax allowance doesn’t help the people it should.