Cameron woos voters with tax cuts

Published: Wednesday 1st October 2014 by The News Editor

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David Cameron has promised tax cuts worth £7.2 billion to 30 million voters around the country if they return him to Downing Street with a Conservative majority in May’s general election.

In his final conference speech before the 2015 poll, the Prime Minister said a future Tory government would raise the threshold at which workers pay the higher 40p rate of income tax to £50,000, while increasing the personal allowance below which no tax is payable to £12,500.

The changes – to be in place by 2020 – would be paid for by cutting spending elsewhere and would remove 800,000 middle-earners in jobs like teaching or the police from the higher rate of tax and take a further one million out of income tax altogether.

Meanwhile, a Conservative government would ensure that the UK’s corporate taxes were the lowest in the G20 group of developed nations throughout the five-year parliament – “lower than Germany, lower than Japan, lower than the United States”.

In a 52-minute address characterised by aides as “profoundly optimistic”, Mr Cameron said he wanted to make Britain “a country that everyone can be proud to live in”.

Conscious of concerns that the GDP growth of recent years has not fed through to household incomes, the Prime Minister said that while his first term in power had been about saving the country from “economic ruin”, the second would see a “long-term economic plan for you” which would focus on making the lives of ordinary families better in terms of improved jobs, homes, education, health and pensions.

He confirmed plans, announced earlier in the week, to protect NHS spending over the next five years, abolish the 55% tax on inherited pension pots and build 100,000 starter homes, while insisting the Tories would cut £25 billion from public spending and welfare to put the UK on track to eliminating the national deficit.

Mr Cameron denounced Ed Miliband’s Labour as “this high-spending, high-taxing, deficit-ballooning shower” and said it would be “madness” to expect a vote for them in May to end in anything but “economic disaster”.

Britain was now “regaining its purpose, its pride and its confidence”, he said, adding: “We’re at a moment where all the hard work is finally paying off and the light is coming up after some long dark days.

“Go back now and we’ll lose all we’ve done, falling back into the shadows when we could be striding into the sun.

“That’s the question next May – Do you want to go back to square one or finish what we’ve begun?”

After a conference which threatened to be overshadowed by the defection of two Tory MPs, a donor and a former deputy mayor to Ukip, Mr Cameron also turned his fire on the eurosceptic party which many Tories fear is the main obstacle to a majority in May.

Conservatives were the only party which could deliver an in/out referendum on Britain’s EU membership, while voters who backed Ukip “could go to bed with Nigel Farage and wake up with Ed Miliband”, he warned an audience who had been handed Union flags to wave during his speech.

In a lengthy passage which a Farage aide joked sounded like a “Ukip megamix”, the PM promised that he “will not take no for an answer” from Brussels on limiting free movement of EU workers, will “sort out” the European Court of Human Rights and deliver a British Bill of Rights to replace Labour’s Human Rights Act.

Conservative supporters tempted by Mr Farage should recognise that there was “only one real choice” in May, between Mr Miliband or himself in Downing Street, said the PM, warning: “If you vote Ukip, that’s really a vote for Labour.”

Reflecting the Tory strategy of framing the election as a straight choice between two leaders, he said voters should ask themselves: “On the things that matter in your life, who do you really trust?”

He made no direct reference to his Liberal Democrat coalition partners but told activists – who have sometimes voiced suspicion about his closeness to Nick Clegg – that “coalition was not what I wanted to do, it’s what I had to do” and that he wanted “a majority Conservative government” after 2015.

Mr Cameron promised to deliver “full employment” in Britain and to “abolish” youth unemployment altogether by requiring young people to “earn or learn” rather than going straight from school to benefits.

After Chancellor George Osborne’s announcement of a two-year freeze on working-age benefits which will cost low and middle-income households £3.2 billion, the PM acknowledged that he could not offer voters “an easy life” but would have to continue with cuts after the election. He said he was “confident” of achieving the necessary savings through spending cuts alone, without raising taxes.

He wanted to offer voters “a good job, a nice home, more money at the end of the month, a decent education for your children, a safe and secure retirement”, but this would only be possible if the country continued down the deficit-reduction path set out by the Chancellor.

Mr Cameron accused Labour of “pontificating about poverty” while “leaving a generation to rot on welfare”, and said that after presiding over reduced inequality and rising employment it was the Conservatives who could claim the mantle of “the real party of compassion and social justice today”.

But it was on health that he turned his fiercest fire on Labour, accusing them of “spreading complete and utter lies” about Tory plans for the NHS and of presiding over the hospital scandal of Mid-Staffordshire while in power.

In angry tones, he reminded activists of his own experiences as a father who relied on NHS care for his profoundly disabled son Ivan, who died aged six in 2009, and asked: “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?”

Aides said that the tax changes announced by the PM would mean a typical basic rate taxpayer paying £500 less in 2020 than they do today, while someone earning between £50,000 and £100,000 would see their tax bill reduced by £1,313.

Some one million people earning between £10,500 – the level at which the allowance will stand next April – and £12,500 will be lifted out of income tax altogether.

The vast bulk of the £7.2 billion cost of the measures relates to the rise in the personal allowance, which eats up £5.6 billion while the remaining £1.6 billion comes from the increasing the higher rate threshold from its current £41,900.

“Lower taxes for hard-working people, that is what I call a Britain that everyone is proud to call home,” said Mr Cameron.

After a decade in which too many middle-earners have been dragged into a higher rate originally intended only for the richest, he said he wanted to “bring back some fairness to tax”.

“Let the message go out that with the Conservatives if you work hard, do the right thing, we say you should keep more of your own money to spend as you choose. That is what our long term economic plan means for you.”

Shadow chancellor Ed Balls accused the PM of “trying to pull the wool over people’s eyes”, adding: “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?”

And Chief Secretary to the Treasury Danny Alexander said that raising the personal allowance was a Liberal Democrat policy which Tories had opposed at the last election.

“The Tories’ shameless attempt to copy Liberal Democrat tax policy will be utterly incredible to the millions of working people who they have made clear will be their main target for cuts in the next Parliament,” he said.

Published: Wednesday 1st October 2014 by The News Editor

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