Tax cuts leave 1.9 million £600 better off, coalition claims

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NEARLY two million taxpayers in Yorkshire and the Humber are paying £600 less tax than they did when Labour were in power, according to the coalition.

Deputy Prime Minister and Sheffield Hallam MP Nick Clegg hailed “a major income tax cut for ordinary working people” which had been achieved by raising the personal allowance – the point at which people start paying tax – to £9,440.

According to the latest figures 201,000 people in Yorkshire and the Humber have been lifted out of paying tax since the 2010 election, including 21,660 in Leeds.

But critics say it is untrue people are £600 better off, given stagnant wages, cuts in benefits and 20 per cent VAT.

Mr Clegg said they would reach their manifesto pledge of a £10,000 starting point for personal tax allowance next year, adding: “We need to make sure those families get real help in these tough times. In a household where two people are working, think of the difference an extra £1,200 will make.

“That’s money to help cover energy bills, or mortgage repayments, or to go towards a holiday – whatever you and your family need.”

But George McManus, who is standing as Labour’s candidate for the Mid Holderness ward for East Riding Council, said many people were paying “less on less”, with more in temporary lower-paid work, or facing stagnant wages.

He said: “Almost everything Nick Clegg is bragging about has been lost as the result of the increase in VAT – which is an effective wage cut – without counting inflation affecting wages, bedroom tax or granny tax, so people’s actual disposable income has dropped dramatically in the last three years.

“The increase in personal tax allowance doesn’t in any way make up for all the other cuts.”