New Year, Same Old Politics

The Conservatives' big new plan for 2009 is tax cuts of around £4bn by increasing the tax threshold by £2,000. Those able to take full advantage of this would save an extra £400.

They plan to pay for this through slowed public spending growth in all areas except health, education, defence and international development.

Labour's response, almost without thinking about it, was to argue that these savings would only be made through real-terms cuts to public services.

I can only imagine it's going to come from the same place, ultimately, as the £5bn in efficiency savings that Labour announced in the Pre-Budget Report back in November but whose details they would only flesh out in the Budget when it comes around in March.

Perhaps it could also come from the same place as the £37bn in public spending cuts to be made over the next five years that were slashed from budgets between the 2008 Budget and the PBR in November.

Let's also remember that Labour were more than happy to find £12bn to fund their bizarre 13-month VAT giveaway.

So far, so same old.

Except that Plaid made their ideas on this public back in November...and we costed it.

We called for an increase in the personal threshold for tax for all basic rate taxpayers of £2,000 - exactly what the Conservatives are doing now, except that ours would apply across the board, not just on savings.

We would effectively be putting £400 back into almost everybody's pocket - allowing them to save or spend this money as they liked, giving people the choice.

Those who spend would be stimulating the economy, those who save would be putting money into the banking system.

This would cost around £10bn, less than the cost of the VAT reduction offered by Labour, and covered by scrapping white elephant schemes such as ID cards.

A further suggestion made by Plaid back in November, to counter the difficulties faced by savers due to continued interest rate cuts, was an increase in the cash ISA from £3,600 to £7,200, giving savers the opportunity and incentive to save and invest money tax free - and giving them more money than the Conservatives plan will.

Nice to know they're listening to us - even if they're not prepared to be radical enough to make the real changes.