Budget 2012: More than 100,000 low earners will have been lifted out of income tax across three counties

More than 100,000 people across Norfolk, Suffolk and Cambridgeshire will have been lifted out of paying income tax by 2014 if the Government achieves a new target expected to be announced today.

The figure has emerged as Chancellor George Osborne prepares to make his third budget speech in the House of Commons in which he is expected to announce that efforts to lift all those earning less than �10,000 out of income tax altogether will be stepped up a gear.

Business Minister and North Norfolk Liberal Democrat MP Norman Lamb said: 'The move towards raising the income tax allowance to �10,000 is a dramatic shift, the most significant shift in decades, and it has been one of the Liberal Democrats' priorities.

'It is all about easing the tax burden and putting money back into the pockets of low and middle income earners - my hope is that the budget delivers a shift in that direction much quicker than had been planned.'

When the coalition came to power people were taxed on the income they earned over �6,475. But ministers said they eventually wanted to raise that allowance to �10,000, meaning low-earners making less than that amount would not have to pay any income tax at all.

Their previous intention was to increase the allowance 'towards' �10,000 by the time of the next election in 2015, but today Mr Osborne is expected to announce that much faster progress will be made to lift low-earners out of paying income tax.

Last year Mr Osborne announced that in April this year the allowance would rise to �8,105. Today he is expected to announce it will rise to around �9,000 next year and will hit the �10,000 mark much earlier than planned by April 2014.

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That would mean that in Norfolk 38,400 low earners would have been lifted out of paying income tax by the measure.

Meanwhile in Suffolk 41,500 people would no longer have to pay income tax and in Cambridgeshire 25,600 would no longer have to pay - bringing the total across the three counties to 105,500 people.

Conservative MP for Mid Norfolk George Freeman said: 'Allowing people to keep more of their hard earned income is an instinct that runs deep in Conservative thinking.

'I hope very much that our shared commitment with our coalition partners to ease the burden of taxation on those in low paid employment will come through clearly in today's budget.'

However, raising the income tax allowance to �10,000 will also see middle income and some higher income earners getting tax relief too, as less of their wage would be taxable.

The Institute of Fiscal Studies, an independent research body, has estimated that workers earning between �10,000 and �116,210 will save around �379 a year when the Government increases the income tax allowance to �10,000.

It means households in which there are two earners that fall within that wage range could save an extra �758 a year between them by April 2014.

The coalition is understood to see lifting low earners out of income tax as crucial to allowing it to make the politically tricky move of abolishing the top 50p rate of income tax for those earning more than �150,000 - another measure expected in today's budget.

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