A Westcountry Liberal Democrat MP has warned his party’s flagship cut to income tax policy risks making it appear to voters there is “money to splash around” despite the austerity programme.
Taunton Deane MP Jeremy Browne, sacked as a minister last year, warned a battle with the Tories over ownership of the idea risks backfiring.
From April, people will not pay tax on the first £10,000 that they earn but Nick Clegg has said he would like to see the income tax threshold raised to £10,500, worth £100 a year to basic-rate taxpayers.
Mr Browne told a pre-Budget event hosted by the Policy Exchange think-tank that while he supported the £10,000 threshold, raising it higher would “cost a large amount of money”.
He said: “I think the government needs to make sure it explains the necessity of deficit reduction with absolute clarity. The headline delivery point will be arrival of the £10,000 exemption from next month.
“I wonder then where the government will go. The Lib Dems are very keen to make sure everyone understands this is a policy stamped with a Lib Dem ownership mark, but the Tories are keen to usurp the ownership of that.
“As a result there is a tendency within government, between the two governing parties, to keep knocking it up another £500 every Budget just to keep try and stay ahead of the race.”
The former Home Office minister added: “Maybe the government could be better placed to realise how much money has already been given away through this policy."