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By Tim Montgomerie
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TAX+There are a lot of press stories yesterday and today about the Chancellor's tax options in the looming budget. Mr Osborne will meet his fellow Quadsters (Cameron, Clegg and Alexander) later today to discuss options.

It is understood that he's kicked the income tax threshold ball back into Mr Clegg's court after the Lib Dem leader had called for an acceleration in that policy to help lower waged families cope with these difficult economic times. Mr Osborne is sympathetic to the Deputy Prime Minister's ambition but The Sunday Times reported (£) that he has encouraged Liberal Democrats to themselves identify measures to fund the higher threshold. Their favoured measure – "a crackdown on stamp duty avoidance by the super-wealthy" – is likely to raise £500 million at most.

Tory members were asked about Clegg's tax threshold speech in the recent ConHome readers' survey*:

  • 53% agreed that it was a vote winner for the Liberal Democrats and 29% disagreed.
  • 76% over just 16% agreed, however, that the wealth taxes proposed by Nick Clegg to fund the increase "hurt growth" and were therefore "dangerous for the economy".
  • There was also a strong feeling that Nick Clegg was acting irresponsibly in making his unilateral call for tax cuts. 81% over 15% agreed that "it is irresponsible for Nick Clegg to be recommending a tax policy before the Coalition as a whole has decided its joint policy".
  • Tory members are also alive to the danger of Clegg's "cut taxes on the poor or defend the wealthy" message. 85% over 10% agreed that "there is a danger that Nick Clegg is presenting himself as the friend of the poor and styling the Tories as defenders of the wealthy".


The Chancellor does appear to have ruled out any early introduction of a married tax allowance. Although introducing this allowance is promised in the Coalition Agreement (there is permission for Lib Dem MPs to abstain on the issue) and there is some evidence that it is more pro-poor than raising the income tax threshold, any recognition of marriage is strongly resented by the Liberal Democrats. Tory MP Stewart Jackson has told The Express that failure to introduce the allowance represented a “failure of leadership” by David Cameron and the delay felt "like kow-towing to the Liberal Democrats.”

There will also be disappointment among some Tory MPs that George Osborne is unlike to substantially modify his plan to take child benefit away from 40% taxpayers. The Chancellor is reportedly reluctant to enact any measures, including on the 50p rate, that will feed the impression that he is looking after the already-haves.

Some Tories are privately lobbying the Chancellor to cut spending more quickly in order to fund some supply-side tax relief. John Redwood has recently suggested some ways of doing this.

* (1,411 members completed the survey on 31st January and 1st February.)

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