Reform UK has announced a major economic proposal to raise the tax-free personal allowance to £15,000 should the party secure victory in the next general election. The plan, which party insiders describe as their flagship policy for the current conference, is set to be presented by economic spokesman Robert Jenrick on the final day of the event in Birmingham.
Jenrick intends to implement the tax cut within the first 100 days of taking office as chancellor. The party estimates that increasing the threshold by £2,430 would provide a £500 annual saving for most taxpayers and remove 2.9 million individuals from paying income tax entirely. While the party’s 2024 general election manifesto previously targeted a £20,000 threshold, Jenrick will clarify that this remains the long-term objective.
Addressing the conference, Jenrick is expected to frame the policy as a commitment to workers, stating, "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 will criticize the current government’s fiscal approach, noting that 1.3 million people were added to the tax rolls last year due to the freeze on the personal allowance, which has remained at £12,500 since 2021. Jenrick further described the Labour Party's decision to extend this freeze until 2031 as a "betrayal" that costs full-time minimum wage workers over £750 annually and results in the taxation of the state pension.
The policy is projected to cost £17.7bn in its first year, rising to £21bn by the fifth year. To fund this, Reform UK plans to enact £80bn in public spending cuts. This strategy includes a £50bn reduction in welfare spending, though the party has explicitly stated it will not cut the proportion of the budget allocated to the state pension. Instead, the savings would be sourced from reduced disability benefit spending, the removal of certain benefits for foreign nationals, a £10bn cut to net-zero programmes, an £8bn reduction in the civil service headcount, and a £7.1bn cap on the foreign aid budget.
The issue of the frozen allowance has gained broader political attention, with Prime Minister Andy Burnham recently noting to the Times that public frustration regarding the threshold had "lodged in my mind." Burnham indicated that while the matter would be reviewed in the upcoming Budget, any adjustments would be challenging given the current financial climate.
Half of the £353bn of welfare spending goes on the state pension, but Reform has said it will not cut this proportion.
Does Reform's plan to cut £50bn in welfare spending add up?
