By Ben Kerrigan-
Reform UK is promising to raise the income tax-free personal allowance to £15,000 within its first 100 days in government, in what the party is presenting as one of its flagship economic policies ahead of the next general election.
Robert Jenrick, Reform UK’s economic spokesman, is expected to announce the proposal in his speech at the party’s conference in Birmingham, describing the tax cut as part of a wider programme aimed at increasing the rewards for working people and reducing the financial burden on households.
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Under the proposal, the personal allowance would rise by £2,430 from its current level of £12,570. Reform estimates that the change would save most taxpayers around £500 a year, while approximately 2.9 million people would be removed from income tax altogether.
The party says the measure would cost approximately £17.7 billion in its first year, rising to around £21 billion by the fifth year. Reform argues that the cost could be financed through a much broader programme of public spending reductions, which it estimates could deliver around £80 billion in savings.
Jenrick is expected to tell conference delegates that increasing the tax-free threshold would be central to Reform’s ambition to make employment more financially attractive.
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“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 expected to say.
He is also expected to attack the decision to freeze the personal allowance, arguing that the policy has resulted in increasing numbers of people being drawn into the tax system as wages rise.
“1.3 million were dragged into paying tax last year alone,” Jenrick is expected to say. “Why? Because the tax-free allowance has been stuck at 12 and a half grand since 2021. And Labour has frozen it until 2031.”
He is expected to argue that the freeze has placed an increasing burden on low-paid workers, claiming that a full-time worker on the minimum wage is now paying more than £750 a year as a consequence of the policy.
Reform’s proposed increase also represents a more immediate version of a policy the party put forward at the 2024 general election. Its manifesto promised to increase the personal allowance to £20,000 over the longer term, and Jenrick is expected to reaffirm that £20,000 remains the party’s ultimate ambition.
The announcement comes as the government faces continuing pressure over the impact of frozen tax thresholds on household finances. When the personal allowance is frozen while wages and prices increase, more people can become liable for income tax and existing taxpayers can move into higher tax bands. This phenomenon, commonly known as fiscal drag, has become an increasingly important feature of the UK’s tax debate.
Reform’s proposal is therefore likely to intensify political pressure on the government over whether the tax-free allowance should remain frozen.
The party’s ability to finance the proposed tax reduction, however, is likely to become a central part of the political debate.
Reform says the tax cut would be funded through an extensive programme of spending reductions. The party has previously outlined plans to reduce welfare expenditure by approximately £50 billion, although it says it would not reduce the proportion of welfare spending devoted to the state pension.
Around half of the UK’s welfare spending, according to Reform’s figures, goes towards the state pension. Instead of reducing pension spending, the party says it would seek savings principally from disability benefits and by restricting access to some benefits for foreign nationals.
Reform also proposes to reduce spending by approximately £10 billion through the abolition or reduction of net-zero programmes, cut around £8 billion by reducing the civil service workforce and save approximately £7.1 billion by placing a cap on the foreign aid budget.
Jenrick has argued that additional savings could be found by tackling what Reform describes as waste within government. Appearing on BBC Breakfast, he said Reform would also seek to redirect government spending towards what it regards as the priorities of British citizens.
The party has particularly criticised the UK’s foreign aid spending, with Jenrick saying Britain should “stop paying foreign aid to rich countries” and arguing that the country should prioritise its own population.
“Yes, we’ll pay for disaster relief but the vast majority of that budget should be spent on the priorities of our own people,” he said.
Reform’s economic programme also places a strong emphasis on reducing the cost of Britain’s transition towards net zero. Jenrick argued that the UK’s contribution to global emissions was relatively small and questioned the economic rationale for Britain seeking to decarbonise faster than other countries.
He said that attempting to move faster than other nations was “just impoverishing our own people”.
The proposal comes at a politically sensitive time for the government. The frozen personal allowance has increasingly become a source of political controversy, with millions of households facing higher effective tax burdens as earnings rise.
Prime Minister Andy Burnham has previously acknowledged the political frustration surrounding the issue. Shortly after becoming Prime Minister, he told the Times that the frustration expressed by voters in his Makerfield constituency over the frozen allowance had “lodged in my mind”.
He subsequently indicated that the issue would be considered in the government’s forthcoming Budget, although he warned that any change would be difficult in light of the country’s financial position.
Reform’s £15,000 proposal is therefore likely to place the government under further pressure to address the tax threshold, while simultaneously forcing Reform to demonstrate that its proposed spending reductions are realistic and deliverable.
For Reform, the political calculation is straightforward: raise the amount that workers can earn before paying income tax, put more money into household budgets and present the policy as a reward for employment.
But the central question will be whether the party can deliver the promised tax cut without creating a significant hole in the public finances.
Reform insists that its proposed £80 billion programme of spending reductions provides sufficient room to fund the policy. Critics are likely to scrutinise both the scale and timing of those savings, particularly where they involve welfare, foreign aid, the civil service and net-zero programmes.
The proposed increase to £15,000 nevertheless gives Reform a clear economic message as it looks towards the next general election: Britain’s workers should keep more of what they earn, and government spending should be reduced to make that possible.
Whether voters ultimately accept that calculation may depend less on the attractiveness of a £500 annual tax saving than on whether Reform can convince the electorate that its wider programme of spending cuts is financially credible and politically achievable.
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