Reform UK has announced a commitment to increase the tax-free personal allowance to £15,000, should the party win the next general election. Robert Jenrick, Reform's economic spokesman, stated that this tax cut would be implemented within the first 100 days of taking office.
This policy is considered by party insiders to be a central announcement for their current conference and a significant tax proposal leading up to the election. Reform estimates that raising the threshold by £2,430 would result in an annual saving of £500 for most taxpayers, and would exempt 2.9 million individuals from paying income tax altogether.
The party projects the policy would cost £17.7 billion in its initial year, escalating to £21 billion by the fifth year. Reform proposes to finance this through £80 billion in planned reductions to public spending. Jenrick is expected to state in his speech, "As chancellor, I will wake each morning with one purpose. To make Britain a better place to be a worker than it was the day before."
He is also expected to address the current freeze on the tax-free allowance, which has remained at £12,500 since 2021 and is frozen by the Labour party until 2031. Jenrick plans to highlight that this freeze costs a full-time worker on the minimum wage over £750 annually and means that the state pension is now subject to taxation.
In its manifesto for the 2024 general election, Reform UK had previously proposed raising the threshold to £20,000, a long-term objective that Jenrick indicated remains a goal. Earlier, Andy Burnham had commented on the "frustration" surrounding the frozen allowance in his constituency, noting that it would be considered in the upcoming Budget, though he acknowledged potential financial difficulties.
Reform's proposed spending cuts include a £50 billion reduction in welfare spending. While half of the UK's total welfare spending, £353 billion, is allocated to the state pension, Reform has stated it will not cut this portion. Instead, the party aims to decrease spending on disability benefits and revise eligibility for certain benefits for foreign nationals.
Further proposed savings include £10 billion by discontinuing net-zero programs, £8 billion by reducing the civil service workforce, and £7.1 billion by capping the foreign aid budget.