David Cameron launched an audacious bid to woo voters in next year’s general election by pledging to raise the personal income tax threshold by £2,000 a year as well as lifting the 40% tax band to £50,000.Casting the Conservatives as the “trade union for hardworking” people, the prime minister reached out to aspirational voters in Middle Britain by unveiling a £7.2bn double tax cutting promise, which prompted a rapturous reception at the Tory conference.
Increasing the tax-free personal allowance from £10,500 to £12,000 would, Cameron said, ensure that full-time workers on the minimum wage were exempt from paying income tax.
In a speech that was designed by Tory strategists to lay the basis of a centre-ground Tory pitch to the nation – and to respond to threats from Labour and Ukip – the prime minister:
• Pledged to deal with “fiscal drag”, the process by which lower income earners are dragged into paying higher tax rates, by announcing the threshold at which the 40% tax rate is paid would be raised from £41,900 to £50,000 by the end of the next parliament in 2020. This would cost £1.6bn to implement if the Tories did so in April 2020 – the last chance before the 2020 election.
• Highlighted the Tories’ credentials as representing lower income families by announcing that a further 1 million people would be taken out of paying income tax altogether by raising the personal income tax threshold to £12,500.
This would cost £5.6bn and would mean that people in a full-time job on the minimum wage would pay no tax – “nothing, zero, zilch”, in the prime minister’s words. The personal tax threshold is due to be raised to £10,500 from next April after strong pressure from the Liberal Democrats.
• Moved to neutralise Labour attacks on the Tories for attempting to privatise the NHS with a highly emotional description of his personal commitment to the NHS after it helped to treat his severely disabled son, Ivan, who died in 2009. The prime minister’s wife, Samantha, was seen to be in tears as he said of the Labour party: “How dare they frighten those who are relying on the NHS right now?”
• Respond to the Ukip threat by pledging to scrap the Human Rights Act, which will be replaced by a new British bill of rights that would transform Britain’s relationship with the European court of human rights. The prime minister also said that he would put restrictions on the freedom of movement within the EU at the heart of his renegotiation plans before his planned referendum in 2017.
Cameron also took the rare step from a Tory conference platform of naming Ukip and its leader as he highlighted one of his main messages of the election campaign with a joke. He said: “If you vote Ukip – that’s really a vote for Labour. Here’s a thought. On 7 May you could go to bed with Nigel Farage and wake up with Ed Miliband.”
Downing Street regards the double tax-cutting announcement as one of the most significant announcements of the parliament as the prime minister sought to assure middle and lower income earners that the years of austerity would eventually ease.
In his speech, however, Cameron said that the tax cuts could only be delivered if the structural budget deficit was eliminated – to be replaced by an overall budget surplus – towards the end of the parliament.
Setting out the plan to ensure that nobody earning below £50,000 pays the 40% rate of income tax, he said: “The 40p tax rate was only supposed to be paid by the most well-off people in our country but in the past couple of decades far too many have been dragged into it: teachers, police officers.
“So let me tell you this today: 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.”
The plan, which will be introduced by the end of the next parliament in 2020, will also be accompanied by raising the personal tax threshold to exempt the low paid from paying income tax.
He said: “I can tell you now that a future Conservative government will raise the tax-free personal allowance from £10,500 to £12,500. That will take 1 million more of the lowest paid workers out of income tax – and will give a tax cut to 30 million more.
“So with us, if you work 30 hours a week on minimum wage, you will pay no income tax at all. Nothing. Zero. Zilch. Lower taxes for our hardworking people. That’s what I call a Britain that everyone is proud to call home.”
Cameron said that Labour could not make a credible offer because it wanted to create an unrealistic “brave new world” based on tax and spending. He said that Miliband was unqualified to be prime minister because he had forgotten to mention the deficit in his notes-free speech to the Labour conference last week.
But the most emotional part of his speech came when Cameron recalled the nights he spent sleeping in hospitals, as the NHS cared for his late son, to denounce Labour for suggesting that he was not committed to the health service.
Accusing Labour of spreading “complete and utter lies” about the NHS, he said: “How dare you? It was the Labour party who gave us the scandal at Mid Staffs – elderly people begging for water and dying of neglect.
“For me, this is personal. 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.
“How dare they suggest I would ever put that at risk for other people’s children, how dare they frighten those who are relying on the NHS right now. It might be the only thing that gets a cheer at their party conference but it is frankly pathetic.”
The prime minister also sought to counter the threat from Ukip by announcing an overhaul of Britain’s relationship with the European court of human rights.
Citing the way in which the court has called for prisoners to be given the vote and delayed the deportation of foreign terror suspects, he said: “We do not require instruction on this from judges in Strasbourg. So at long last, with a Conservative government after the next election, this country will have a new British bill of rights to be passed in our parliament rooted in our values. And as for Labour’s Human Rights Act? We will scrap it, once and for all.”
The prime minister ended with an appeal for him – a “public servant” – to be given the chance to ensure that Britain does not return to “square one” of taxing and spending.
He said: “So Britain: what’s it going to be? I say: let’s not go back to square one. Let’s finish what we have begun. Let’s build a Britain we are proud to call home – for you, for your family, for everyone.”
Source: theguardian.com/
Author: Nicholas Watt
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