Tax Cut For Over 275,000 People In Cambridgeshire

On 6 April 2012 the Personal Allowance will be raised for the second year in a row, meaning that 276,900 people in Cambridgeshire will get a £130 Income Tax cut and the number people in the area who have been lifted out of paying any Income Tax will reach 8,200.

Julian Huppert, Member of Parliament for Cambridge, said “when the Liberal Democrats first came into office, millions of low-paid workers were paying a higher proportion of their income in tax than the richest were. This was clearly unfair.

“We have made reducing the tax burden on the very poorest a priority, a promise that was on the front page of our manifesto.   Over 20m basic-rate taxpayers have received a £330 tax cut since the Coalition Government came into power. We will continue to increase the Personal Allowance, the threshold at which people start paying Income Tax, until it reaches £10,000. This means that someone working full-time on the minimum wage will have had their Income Tax bill halved.

“At the same time, the Liberal Democrats are making sure the rich pay their fair share, by closing loopholes, introducing a tycoon tax and cracking down on tax avoidance. All of this will mean that the richest pay five times more than they did under the 50p tax rate. As we clean up the economic mess Labour left behind, it is right that the broadest shoulders bear the heaviest burdens.”

The Personal Allowance, also known as the Income Tax threshold, will rise to £8,105 on 6 April 2012, up from £6,475 under Labour.

In the early 1970s, the Personal Allowance was worth around 28% of average earnings. By 2010 that had dropped to around 20% as wages had outpaced the increase in the Allowance.

Julian Huppert MP: Response to Yesterdays Budget

Cambridge Liberal Democrat MP Julian Huppert has posted his response to yesterdays Coalition budget announcement via the Cambridge City Liberal Democrat Activists mailing list (in response to a request from Cllr Sarah Whitebread);


"Hi all,


I'm still, like you, trying to digest all the details of the budget.


But I thought I'd write to you with some of the key issues, and my thoughts on it. I've seen Sarah W's email, and I know I'll miss out many details - ask me and I'll do my best to answer them.


I think it's fairly clear which bits of the budget were Lib Dem, and which were Tory.


Our key priority was to increase the threshold at which people start to pay income tax. This was our key policy at the General Election, and we agreed in the coalition agreement to prioritise it as well. Our aim was to lift the threshold to £10,000 by 2015.


The announcement was that it has been lifted to £9,205 - very close to the £10,000 objective, after less than 2 years. This will result in 2 million poorly paid people being lifted out of tax compared to 2010, and cuts for 28 million people, amounting to £546/year for most basic-rate payers, and less for higher-rate earners.


We should be very proud of that achievement, and remember to tell people about it!


For someone who works full-time on the National Minimum Wage, we will have halved their tax bill. I hope we can go further in the next years - I think that no-one earning the minimum wage should pay any income tax at all!


The Tory priority - obsession even - was the 50p tax rate, which is to be cut to 45%. This is not where we would have chosen to focus, but we insisted on countervailing measures to tax high earners - stamp duty on houses over 2 million, reducing tax relief amounts for high earners, and a few other points. These are estimated to raise 5 times as much as the lost income from the tax rate change - so high earners will be paying more (1.3k/year on average, according to the best estimates).


It's also worth remembering that the top rate was 40% for all but 35 days of the Labour Government, and this is still higher than that.


There was also good news for pensions - they are going up by 5.2%, and Steve Webb's Citizen's Pension idea is going ahead, with the State Pension moving from a base £97.50/week, plus extra for some, to a minimum of £140/week for all. There is no change to the income tax threshold for pensioners, who will continue to not pay anything on the first £10,500 (£10,600 for those born before 1938).


There are lots of other details as well - some that should be very good for Cambridge, such as tax credits for video games, assistance for university spin-outs and entrepreneurs, extra money for research infrastructure and 50M for super-broadband in smaller Cities, some of which we will get. And much, much more.


It's not the budget we'd have written ourselves. But it is good for low-earners, and it takes more money from the richest.


Best,


Julian
---
Dr Julian Huppert MP
Member of Parliament for Cambridge
Liberal Democrat
http://www.julianhuppert.org.uk"

LibDems in government: 880,000 people out of income tax

One example of the influence of the Liberal Democrats on the coalition was recently pointed out to me. The first step on the way to the Liberal Democrat policy of lifting the income tax threshold to £10,000 was announced in the emergency budget. This first step increased the tax allowance by £1000 to £7475.

Despite the tight budget constraints left by Labour this first step will lift 880,000 out of paying income tax. It also is a step towards breaking the situation where some people end up worse off if they start work than if they stay on benefits.

The tax cut in the Conservative manifesto was an inheritance tax break for millionaires. The Liberal Democrats have made a real difference here.

Clegg at Conference

This is something of an experiment: a video on the blog.





I feel that Clegg's speach in Bournemouth has not been fully reported, the emphasis he placed on fair tax has been simplified to just tax cuts. See for yourself what Clegg said by viewing this video or going to view it on YouTube.

BBC's newsnight did an interesting piece on the reaction of floating voters to the three party leaders. It can be viewed online at the BBC Newsnight website.

Council tax bill: £1 in every £5 on bus-fare bill

£1 in every £5 paid by Cambridge's Council tax payers is being taken by Stagecoach and other bus operators to fund free bus travel for elderly people many of whom don't even live in the city.

The dramatic impact of the bus scheme has been highlighted in the five-year financial strategy just published by the City Council.

The bus scheme devised by Gordon Brown penalises places like Cambridge,which are forced to pay the bus fares for all elderly people who get on a bus in the city, including return fares for people who live outside Cambridge.

The result is that instead of costing the £1.2 million per year that is provided by Government, the scheme in 2008/9 is expected to cost Cambridge £2.5 million with the additional £1.3 million being met by Cambridge tax payers.

Whilst we support the scheme it is another example of Gordon Brown's Labour government coming up with a headline grabbing idea, failing to fund it properly, and then trying to make others take the blame for the problems.

Ian Nimmo-Smith, Liberal Democrat leader of the City Council, said

The way the government has botched bringing in free bus travel for the elderly is disastrous. We already knew the scheme was underfunded so we had put £680,000 into our budgets, but it is so popular that we now need to find a further £620,000 ontop of that.

Cambridge City Council could be forced to cut hundreds of thousands of pounds of services to meet this unfair bill we've been landed with by Mr Brown.

Cambridge City Council was rated as Excellent and as one of the top four financially competent councils by the Audit Commission.

The scheme is a good idea but the Labour government should play fair and pay fair.

10p tax fix leaves 1.1 million still worse off

Whilst Gordon Brown may have got some of the message about increasing tax on those on low incomes, he still has some way to go.

There are still about 1.1 million people on low incomes around £100 worse off. This is to pay for tax cuts on those on middle incomes or better.

The Liberal Democrats were the only party to oppose the abolition of the 10p rate. Vince Cable pointed out the problems when they were announced in the budget last year.

You can see full details on our tax policy.