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Clegg pledges £1bn tax giveaway

The Liberal Democrats want the Coalition to raise the income tax threshold above £10,500 before the next election, representing a £1 billion tax giveaway. Nick Clegg said the plan was "no secret" but it had not been "agreed yet" with David Cameron.

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Clegg pushes Osborne for £1bn income tax giveaway

Liberal Democrat leader Nick Clegg wants Chancellor George Osborne to raise the income tax threshold. Credit: Dominic Lipinski/PA Archive

The Liberal Democrats want the coalition to raise the income tax threshold above £10,500 by 2015, which could effectively mean a £100-a-year tax cut to 24 million basic rate payers.

The move, which would take half a million people out of income tax altogether, would represent a £1 billion tax giveaway before the next general election.

The Lib Dems have already seen the coalition achieve their manifesto commitment to raise the personal allowance to £10,000 - which was finally reached in the last Budget in March.

Lib Dem leader Nick Clegg will write to party activists next week calling for a "workers' bonus" to reward voters for the financial sacrifices they have made during the years of austerity.

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