The Tory talk of backing an increase (£) in the personal tax allowance to £12,500 serves several purposes. First, it makes it easier for the Tories to champion raising the rate to £10,000 and it gives them a tax cuts that’s aimed at low and middle income earners. But it also draws a neat dividing line with Labour, which is not keen on this policy, ahead of any future coalition negotiation.
Indeed, I understand that thinkers close to Miliband have urged Nick Clegg to drop his attachment to raising the income tax threshold and instead think about using the money for a big universal childcare offer.
Danny Alexander has already been out trying to retain Lib Dem ownership of this policy. If the Tories do match it, I suspect that the Liberal Democrat response will simply be to go even further. The Tories, though, have sent a message that they are open to one of the Liberal Democrats’ biggest post-2015 priorities. It looks like we might need a new word in British politics for a pre-negotiation concession.Tags: Coalition, Danny Alexander, Income tax, Lib Dems, UK politics