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Cameron versus Miliband…’it’s all getting a bit taxing’

Cameron versus Miliband…’it’s all getting a bit taxing’

🕔29.Apr 2015

David Cameron sought today to portray the Conservatives as a party that would never raise taxes during the next Parliament, but his “locked in” pledge was dismissed as an unbelievable pre-election gimmick by Labour.

With a week to go to polling day and the two main parties level pegging in the opinion polls Mr Cameron hoped to make a difference by stepping into a fresh taxation battleground.

He immediately triggered a bitter round of claim and counter claim about the Tories’ motives.

Mr Cameron will pass a law if returned to power preventing the Government from increasing income tax, VAT, or national insurance for five years.

The new Tory tax pledge was unveiled in a speech at the Sertec engineering plant in Coleshill, Warwickshire.

Mr Cameron said a future Conservative government would make sure:

  • Nobody working 30 hours on minimum wage will ever pay income tax
  • The tax-free personal allowance will rise to £12,500 by 2020
  • The 40p tax threshold will increase to £50,000 by 2020 – and will always rise at least in line with inflation
  • The family home will be taken out of inheritance tax, by lifting the threshold for married couples to £1 million

His promise was ridiculed by Labour and Liberal Democrat politicians who quickly took to the airwaves and social media to claim that the Prime Minister would have to pay for a tax freeze by slashing child tax credits, hitting low-paid working families.

Labour said the Tories’ plans envisaged £58 billion worth of savings by 2020 and could even include cutting child benefit.

Ed Miliband, the Labour leader, said “the family budget” was already at risk from Conservative plans to reduce welfare spending by £12 billion.

The pledge to freeze tax rates would have to be funded through a £3. 8 billion raid on child tax credits, leaving families with two children up to £2,000 worse off, Mr Miliband claimed. He promised that a Labour government would raise tax credits at least in line with inflation until 2020.

The Liberal Democrats said Mr Cameron only needed to pass such a law because “he can’t trust his own Chancellor to make their plans add up”.

In his speech the Prime Minister said his planned legislation to prevent tax rises “crystallises the clearest choice on the economy for a generation” in next week’s election.

He said Labour “would go on borrowing for ever” and had no intention of clearing the deficit. Labour was an “anti-enterprise” party and would hurt growth, he added.

Voters should trust their “gut instinct” on May 7 and remember “the first law of politics” that Labour will put up taxes while the Tories are dedicated to cutting them, he added.

A Conservative Government would introduce a law within the first 100 days to keep taxes down through the lifetime of the next parliament.

Mr Cameron said a five-year tax lock would ensure that from May 2015 to May 2020 there will be no increases in income tax rates, VAT or National Insurance.

He added: “Beyond the plain facts, it also comes down to gut instinct. When you’re standing in the polling booth, ask yourself: on the things that matter in your life, who do you really trust?”

Mr Cameron spoke about what he said were the big differences between the Conservatives and other parties on the deficit, jobs and welfare.

The choice at the election was “between a country where those who want to work, can work, and people take home more of their own money; versus a country gripped by political paralysis and the economic chaos of higher spending, higher debt and higher taxes, under a weak Ed Miliband government, propped up by the SNP.”

He reminded his audience of the coalition Government’s record on tax cuts so far, which includes raising the tax-free personal allowance taking three million people out of paying tax altogether, cutting National Insurance bills for businesses and freezing fuel duty.

On taxation, Mr Cameron said: “This is the clearest choice on the economy for a generation. And beyond the plain facts, it also comes down to gut instinct. When you’re standing in the polling booth, ask yourself: on the things that matter in your life, who do you really trust?

“When it comes to your tax bill: do you trust the people who taxed you to the hilt when they were in power and still haven’t come clean about the taxes they want to increase next time round? Or do you trust the Conservatives, who have cut income taxes for 26 million people, and who will cut your taxes again next time?

“We know it’s your money, not Government money. You’ve worked for it, you’ve earned it, you should be able to keep it.

“It’s a fundamental difference of approach between the Conservatives and Labour; me and Ed Miliband. It is, in fact, the first law of politics: it’s Labour who put up your taxes, and the Conservatives who cut them.”

As the fallout from the Tory tax-freeze pledge began to resonate, Mr Miliband restated Labour’s policy to increase tax credits at least in line with inflation.

At an event in London alongside Ed Balls and Rachel Reeves, Mr Miliband said: “I am here to reveal the truth: if the Tories get back in on May 8th your family budget is at risk.

“Another five years of Tory government will mean a plan to double the pace of cuts next year, a plan that puts your family budget, your NHS and our country’s future at risk.”

The Conservatives struck back by claiming that Labour has secret plans to lower the upper earnings limit for National Insurance, pushing up payments for millions of working people.

Meanwhile, the right wing think tank the Institute for Fiscal Studies strongly criticised Labour’s flagship tax plans, warning that they will raise “very little money” and inhibit aspiration.

The IFS also warned 1.5 million middle income workers will be dragged into the higher rate of tax under a Labour government over the next five years.

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