Reform UK is preparing to promise a record increase in the income tax personal allowance to £15,000, in a move designed to position the party as a champion of British workers ahead of a possible general election.
Robert Jenrick, Reform’s economic spokesman, is expected to unveil the proposal at the party’s national conference as part of a broader package that the party says would form the basis of its first Budget within 100 days of entering government.
The increase from the current £12,570 threshold would represent the largest single rise in the tax-free personal allowance, according to Reform, and would save most taxpayers about £500 a year.
The party estimates that the measure would remove 2.9mn people from paying income tax altogether while benefiting approximately 40mn people overall. Reform also says the change would ensure the state pension remains outside the income tax system.
Mr Jenrick is expected to commit to implementing the measure in the first Budget of a Reform government, which he has pledged would take place within 100 days of an election victory.
The proposal is intended to highlight the effects of the five-year freeze in the personal allowance under successive Conservative and Labour governments. Reform argues that the threshold is now £3,500 lower than it would have been had it risen in line with inflation.
The policy would cost an estimated £17.7bn in its first year, rising to £21bn by the fifth year of a parliament, according to party calculations.
Reform says the measure would be financed through £80bn of savings it claims to have identified elsewhere in public spending. These include £52bn from welfare reform, £7bn a year from reductions to the foreign aid budget, £10bn from ending net zero subsidies and £7bn from cutting the number of civil servants and quango employees.
Mr Jenrick is due to make his speech later on Saturday.
He is expected to say: “There has never, in our lifetimes, been a worse time to be a worker in Britain.
“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.
“In the first hundred days of a Reform government, in our first Budget, we will raise the tax-free personal allowance from £12,570… to £15,000.”
The proposal is also expected to form part of a broader political attack on Andy Burnham’s Labour government, with Mr Jenrick seeking to draw a direct distinction between spending on welfare, overseas aid and migration and tax cuts for workers.
He is expected to say: “The hard choice for Burnham and for us is exactly the same. It’s either welfare waste, foreign aid and migrants — or the British worker.
“We choose the worker.
“When we can — only when it is paid for in full — I will go further, step-by-step, until we’ve reached Reform’s ambition of a £20,000 tax-free allowance.”
The announcement follows a separate intervention on energy policy by Richard Tice, Reform’s deputy leader, who on Friday outlined proposals to reduce household gas and electricity bills.
Mr Tice said the party would scrap carbon taxes on electricity generators and permanently remove VAT from domestic energy bills.
The plans include withdrawing the tax applied to gas-fired power generation through the UK Emissions Trading Scheme and the Carbon Price Support mechanism.
Reform also intends to repeal a number of other schemes that it argues add to household energy costs, including the Renewables Obligation, Feed-in Tariffs, Warm Homes Discount and Green Gas Levy.
The party estimates that those policies add about £80 to the average household’s annual energy bill.
Together, the tax and energy announcements represent an attempt by Reform to build a more detailed economic programme around reducing the cost of living and lowering the tax burden on workers.
The personal allowance proposal would be among the most expensive commitments announced by the party and will intensify scrutiny of how Reform intends to finance its wider programme. The party insists that its proposed spending reductions would provide sufficient savings to fund the tax cut without additional borrowing.
For Mr Jenrick, the announcement also marks an effort to establish a clear dividing line with both Labour and the Conservatives. By focusing on fiscal drag and the freezing of tax thresholds, Reform is seeking to exploit growing frustration among workers who have been drawn into higher tax bands despite relatively modest increases in their real incomes.
Whether the party can persuade voters that its proposed £80bn in savings are achievable, however, is likely to become a central question as Reform seeks to turn its conference pledges into a credible programme for government.
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