The Prime Minister has announced two major tax cuts that will benefit up to 30 million taxpayers should a majority Conservative government be elected in May 2015.
At the Conservative Party Conference in Birmingham, the Prime Minister said that:
- The tax-free personal allowance will be raised from £10,500 to £12,500. This means that if you work 30 hours a week on minimum wage you will pay no income tax at all, lifting 1 million workers out of tax altogether. In addition, the government intends to work towards its next goal of raising the minimum wage from £6.50 to £7 an hour.
- The threshold at which people pay the higher rate 40p tax will be raised in the next Parliament from £41,900 to £50,000. This will move around 80,000 people out of the 40p tax band.
By 2020, a typical basic rate taxpayer will pay £500 less in tax than they do today. A range of other announcements were made, including:
- Housing: A landmark new policy called Starter Homes will commit to building 100,000 new homes that will be solely available to first time buyers under 40, and will be 20% cheaper than market price.
- NHS: Spending on the National Health Service will continue to be ring-fenced and protected.
- Education: As well as continuing with its current work to introduce further rigour to the curriculum and give teachers more freedom to do what is best for their pupils, the government will guarantee a place on National Citizen Service for every teenager in the country.
- Europe: The Prime Minister voiced his commitment to renegotiating the UK’s membership of the European Union, and re-affirmed that a majority Conservative government will let the British public have an in-out referendum.
- Pensions: Pension Credit will be replaced by a new single-tier pension of £142 a week, compulsory annuities will be scrapped, and the 55% tax rate imposed on pensions passed to your family when you die will be cut to 0%.
Damian Hinds says:
“These measures for the future are committed to maximising fairness; in tax, education, pensions, housing, and healthcare.
“We’ve seen a real improvement in the economy over the last few years, as continuously falling unemployment levels in East Hampshire indicate, but people need to be able to look forward to real improvements in their pockets; that’s what these income tax cuts hope to do. The same goes for pensions; if you have worked hard your entire life, you should be able to leave your family your remaining pension once you pass away without it being radically taxed first.
“I was also very pleased to hear the government’s continued commitment to improving education for our children, enabling young adults to get a foot on the housing ladder, and protecting the NHS, which is without a doubt the best health system in the world. I hope that a Conservative government is voted in next May so that everyone in East Hampshire can feel the benefits of these policies.”