Nick Clegg is planning to push his "workers' bonus" in a speech tonight, promising to raise the starting threshold for income tax to £12,500 in the next Parliament in a bid to help the poorest.
Speaking at Mansion House, he will urge George Osborne to raise the personal allowance above £10,000 next month in his Budget, with the Liberal Democrats keen to take it even further.
Clegg will say: “That will be the main item Danny and I push for in the Budget – again. In the next parliament we would raise the personal allowance so that no one pays any income tax on the first £12,500 they earn."
But as the respected Institute for Fiscal Studies showed in their recent Green Budget publication, just 15% of the gains from increasing the personal allowance would benefit the poorest half of Britons.
"There are better ways to help the low paid via the tax and benefit system than through further increases in the income tax personal allowance," the IFS concludes.
Here are three IFS graphs that show Nick Clegg's "workers' bonus", increasing the personal allowance to £12,500, will help the rich more than the poor.
