David Cameron and Nick Clegg have reaffirmed the coalition will go "full steam ahead" in reforming the economy and tackling the deficit
To launch a joint programme for the second half of parliament the two leaders spoke at Downing Street, setting out policy on several areas for the 2015 election and beyond.
Prior to making the speech they released a 46 page mid-term review in which they reiterated their commitment to the government's current fiscal strategy and tax strategy.
On the subject of tax, the report confirmed, “We have reduced tax for low- and middle income households by raising the threshold at which people start paying income tax from £6,475 in 2010/11 to £8,105 in 2012/13, with a further increase to £9,440 – the biggest ever – announced for 2013/14. By then, we will have taken more than 2 million low paid workers out of the income tax system altogether, while cutting income tax by £443 (in real terms) for around 22 million basic rate taxpayers. Someone working full time on the National Minimum Wage will see their income tax bill halved as a result of these changes.
“We have invested nearly £1bn in HM Revenue & Customs to bear down on tax evasion and avoidance. We will continue to increase the personal income tax allowance towards £10,000, making real-terms steps each year towards meeting this policy objective.”
The review also says the coalition will legislate for the implementation of a General Anti-Abuse Rule in the 2013 Finance Bill.
Although there was little new in the review, the two politicains reiterated that the government is aiming to raise an extra £2bn a year with increased investment in anti avoidance, achieving £9 billion more a year by the end of this Parliament. In addition, they expect to raise more than £5bn in additional tax from Swiss bank account holders who are liable for UK tax.
In the review's foreword they added, "Two-and-a-half years ago, our parties came together in the national interest and formed a coalition at a time of real economic danger. The deficit was spiralling out of control, confidence was plummeting, and the world was looking to Britain with growing anxiety about our ability to service our debts.
"This government's most urgent job was to restore stability in our public finances and confidence in the British economy. In just two years we have cut the deficit by a quarter and have set out a credible path towards our goal to balance the current budget over the economic cycle."
Draft Finance Bill published
What does the Autumn Statement mean for tax
Mixed response to Autumn Statement
Cameron prepares economic growth plan