Party set to make raising tax threshold key to coalition talks

Treasury Chief Secretary Danny Alexander will confirm that increasing the threshold will be written into the party’s manifesto for the contest, and a rise of at least £500 – giving a tax cut of £100 – would be earmarked for the first Budget or Autumn Statement after the election. The Lib Dems have made raising the point at which people start paying income tax to £10,000 a priority in Government, and Mr Alexander indicated pressure was mounting for George Osborne to signal a further rise to £10,500 in this month’s Budget.

In his keynote speech to the Lib Dem spring conference in York, he will say: “We will fight the next election with our own ideas, our own policies, our own values – no one else’s. And I can tell you that a top priority in any negotiation will be our aspiration to raise the personal allowance dramatically again in the next Parliament.

“To raise it to £12,500... That would be a further tax cut for working people of £500.

“At our first fiscal event in the next Parliament, we would deliver another tax cut of at least £100.

“A two term Lib Dem government would then be delivering a tax cut for working people of £1,200 – that’s £100 a month.”

Party leader and Deputy Prime Minister Nick Clegg has called for this month’s Budget to be used to signal a “workers’ bonus” £100 tax cut.

Mr Alexander will say: “Every day in the run up to the Budget Nick and I are drawing strength from our party’s growing campaign to press for a further rise in the allowance to £10,500.”