THE Liberal Democrats are to push for a further hike in personal tax allowances in the Budget next month.

In a speech on the economy tonight Deputy Prime Minister Nick Clegg will say raising the personal allowance on income tax is the "main item" he is demanding from George Osborne in the Budget on March 19.

He will also use his speech to business leaders at London's Mansion House to portray the LibDems as the party of Europe.

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In his Autumn Statement, Mr Osborne increased the salary threshold at which people start paying tax by £235, to £9440, increasing take-home pay for thousands of low-income households.

Mr Clegg will say: "We want to keep cutting income tax for ordinary taxpayers. That will be the main item Danny Alexander and I push for in the Budget - again.

"In the next parliament we would raise the personal allowance so that no one pays any income tax on the first £12,500 they earn. It's our flagship policy because it's how we make work pay, and it's our way of making sure the British people know that this recovery is theirs."

Mr Clegg will seek distance from the Tories by portraying the LibDems as staunchly pro-Europe.

He will say: "We are doing everything we can to protect British trade as the country's most - you might argue only - properly internationalist party.

"As we head towards the European elections in May we will continue to make the case for Britain's membership of the EU - our biggest export market - for the sake of prosperity and jobs."