Conservatives Promise Tax-Free Minimum Wage in Manifesto

Reuters/Leon Neal

David Cameron has pledged to permanently remove those on the minimum wage from income tax. The promise came as part of the Conservative manifesto launch in Swindon, Wiltshire.

The Prime Minister said he would permanently link annual increases in the income tax-free Personal Allowance to increases in the Minimum Wage rather than inflation. This, coupled with the existing commitment to raise the Personal Allowance to £12,500 by 2020, would take anyone working up to 30 hours a week on the minimum wage out of income tax.

The Tories have claimed the increase in the allowance would cut tax for 30 million people, and take a further one million out of income tax altogether. Using legislation to link the allowance to rises in the minimum wage would require future governments to put any changes to a vote in parliament.

David Cameron, told the audience in Swindon: “We’re going to make sure work really pays in our country – not just now, but always. If Conservatives are in Government, we will change the law so that no-one earning the Minimum Wage will pay income tax – yes: the tax-free Minimum Wage.

“Its purpose – to link the personal tax allowance to inflation, so the lowest earners weren’t over taxed and taxed by stealth. And what we’re announcing today is the modern, compassionate Conservative version of that change.

“It means we can proudly say that this is the party of working people. For millions of workers not just the party of low income tax – the party of no income tax.”

The Conservatives did not come up with idea of raising the Personal Allowance. Rather, the coalition adopted it from the 2010 Liberal Democrat manifesto. But since then Chancellor George Osborne has been keen to make it central to the Conservative’s tax policy.

Aside from tax, the manifesto also included a commitment to keep four Trident nuclear-armed submarines. This was in response to Labour’s suggestion that the country could secure itself with just three. However, the manifesto did not commit to spending 2 percent of GDP on defence, despite this being the NATO target.

The central theme of the manifesto was to emphasise the Tory message that they are “the party of working people”. The manifesto proposes to extend the right to buy scheme to all social housing tenants, rather than just applying to council tenants.

The Prime Minister claimed the extension would affect as many as 1.3m people. He also pledged to expand the housing stock by building 400,000 properties. The policy would be funded by requiring local councils to sell their most expensive properties, when they become vacant.

David Cameron said: “The dream of a property owning democracy is alive and we will help you fulfil it.”

The final major announcement was for parents of three and four-year-olds. These nursery aged children will be given 30 hours of free child care a week. Cameron claimed this would save families £5k a year.

Cameron said: “We are the party of working people offering you security for your entire life… The next five years are about building on the successes the country had made.”