At the election, the Lib Dems promised a tax break for people on low and middle incomes by increasing people’s personal tax allowance.  This is the amount anyone can earn before the they start paying tax.

Thanks to the Lib Dems this April, tax allowances have gone up by £1000 to £7475 – meaning nearly a million low paid workers in the country no longer pay income tax.

And many millions more will see their income tax bill fall thanks to this change.

But the Lib Dems are determined to go further and raise the personal allowance to £10,000 a year – and Lib Dem MPs and ministers are campaigning to make sure as the economy recovers future budgets prioritise tax cuts for low and middle earners and not just the rich.

 How local people benefit from Lib Dem tax breaks:

• 1,000 Kingston residents no longer pay any income tax
• Almost 57,000 Kingston people pay £200 a year less income tax
• Council tax frozen for the first time ever

But Labour want eight years of economic pain.

Labour Shadow Chancellor Ed Balls has criticised the coalition government’s budget for making too many spending cuts, too quickly.  At the moment the government is spending £170 billion a year more than it receives in taxes.  Interest payments on the national debt are now £43 billion  a year – more than the entire defence budget. 

So the coalition government is aiming to balance the government’s books over the next four years.  But Labour only want to half the deficit by 2015.  This means under Labour’s plans debt and interest payments would continue to grow meaning cuts and tax rises would go on for a further four years until the budget balanced.