Prime Minister David Cameron made a bumper tax cut pledge to allow 30million people to retain more of their hard earned money during a rousing speech at the Conservative Party conference in Birmingham.
The Prime Minister gave a major boost to future consumer spending and hot tub retailing prosperity with a promise to ‘hardworking people’ to raise the tax-free allowance from £10,500 to £12,500 before 2020; while revealing that the threshold for the 40p income tax rate is set to be raised from £41,900 to £50,000 if the Tories gain power after the next election.
“Once you have a job, I want you to take home more of your own money,” said Mr Cameron; “If you put in, you should get out – not hand so much of it to the taxman.
“We need tax cuts for hardworking people. I have a specific commitment. Today, the minimum wage reaches £6.50 an hour, and before long we’ll reach our next goal of £7.
“I can tell you now that a future Conservative Government will raise the tax-free personal allowance from £10,500 to £12,500. So with us, if you work 30 hours a week on minimum wage, you will pay no income tax at all. Nothing. Zero, Zilch.
“I want to take action that’s long overdue, and bring back some fairness to tax. With a Conservative government, we will raise the threshold at which people pay the 40p rate. It’s currently £41,900, in the next Parliament we will raise it to £50,000.
“If you work hard and do the right thing we say you should keep more of your own money to spend as you choose. That’s what our long-term economic plan means for you.
During his speech Mr Cameron also made a triple commitment to ‘full employment’; ‘the lowest corporate taxes in the G20’; and ‘abolishing youth unemployment’.
“When Britain is getting back to work it can only mean one thing – the Conservatives are back in government,” he said.
Analysts immediately indicated that by introducing the ‘tax-free’ policy it would take a million workers out of tax altogether and provide a timely boost to taxpayers on low incomes that have been struggling to cope with increasing prices as wages continue to rise at a sluggish pace; while those higher earners with incomes just over £42,000 but below the £50,000 threshold are being freed from the extra burden of the 40 per cent tax bracket.
Yet experts highlighted that the impact of the tax packages, calculated to be around £7billion, would be reduced as the longer it takes for the these policies to become enforced, while Robert Joyce of the Institute of Fiscal Studies (IFS) highlighted that the tax policies would cost more than twice the amount raised by Chancellor George Osborne’s proposed benefits freeze.
Labour leader Ed Miliband, who had been heavily criticised for forgetting key sections of his speech during his party’s conference in Manchester, said: “David Cameron doesn’t realise what is happening in our country. The NHS is sliding backwards, people can’t get to see their GP, people are waiting hours in A&E.”
This was despite the fact that Mr Cameron had highlighted that he knew better than most how important the NHS was after the care and support it provided to his disabled son Ivan, who died in 2009 aged six.
“From the Labour Party last week, we heard the same old rubbish about the Conservatives and the NHS. Spreading complete and utter lies,” the Prime Minister declared.
“I am someone who has relied on the NHS – whose family knows more than most how important it is. Who knows what it’s like to go to hospital night after night with a child in your arms, knowing that when you get there, you have people who will care for that child and love that child like their own.”