1st October 2014
David Cameron has promised to cut tax for thirty million people if the Conservatives win next year’s election.
In his Conservative Party conference speech, the Prime Minister said he would raise the tax-free personal allowance from £10,500 to £12,500 by 2020.
He also said the threshold for the 40p income tax rate would be raised from £41,900 to £50,000 under a future Conservative government.
Today, the minimum wage reached £6.50 per hour and Cameron said that “before long” it would be £7.
He added: “We need tax cuts for hardworking people… 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.”
Turning to the fortunes of those on higher incomes, Cameron 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.
“…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 party said that the tax cuts would cost £7.2 billion pounds a year.
However, Labour has attacked the pledge, arguing that Cameron has failed to set out where the money will come from.
Shadow Chancellor Ed Balls, said: “David Cameron’s speech showed no recognition that working people are £1,600 a year worse off under the Tories nor that the NHS is going backwards on their watch.
“Instead he tried to pull the wool over people’s eyes. Nobody will be fooled by pie in the sky promises of tax cuts in six years’ time when David Cameron cannot tell us where the money is coming from. Even the Tories admit this is an unfunded commitment of over £7 billion, so how will they pay for it? Will they raise VAT on families and pensioners again?
“The only concrete pledge we’ve had from the Tories this week is a promise to cut tax credits by hundreds of pounds for millions of hard working people while keeping a £3 billion tax cut for the richest one per cent.”