At the Conservative Party conference in Birmingham, the Prime Minister promised that by April 2020 the point at which people start to pay income tax will be raised from £10,500 to £12,500, meaning that many people on the minimum wage will pay “no income tax at all. Nothing. Zero. Zilch”. In a further pledge, which brought delegates to their feet, he vowed to raise the point at which people pay the higher 40p rate from £41,865 to £50,000.
The measures are set to benefit three million families in Scotland and will save a basic rate earner £500 a year, while someone with a wage between £50,000 and £100,000 will pay £1,313 less in income tax.
Mr Cameron said: “Let the message go out: with the Conservatives, if you work hard and do the right thing, we say you should keep more of your own money to spend as you choose.”
Under pressure following the defection to Ukip of two Tory MPs – Mark Reckless and Douglas Carswell – Mr Cameron offered a vision of a low-tax economy, “full employment” and pledged to end free movement of EU nationals to the UK.
The speech contrasted starkly with the bad news offered earlier in the week by Chancellor George Osborne, who announced a new wave of austerity cuts of £25bn, including £13bn from departmental budgets and £3.2bn saved by freezing all benefits.
The tax cuts will mean the UK government would have to find a further £7.2bn of savings.
Mr Cameron also promised to keep UK corporation tax levels at the lowest levels in the G20 group of top economies. He told Tory delegates this would help achieve the party’s new goal of “full employment in the UK”.
And he promised to abolish zero-hours contracts which prevent people from working for other companies and to raise the minimum wage to £7 an hour in the next parliament. He said: “Those exclusive zero-hours contracts that left people unable to build decent lives for themselves – we will scrap them.”
He contrasted his record in government with that of Labour and angrily hit out at claims made by Ed Miliband that he wanted to destroy the NHS.
Referring to his son Ivan, who had cerebral palsy and epilepsy and died aged six in 2009, he said: “For me, this is personal. I am someone who has relied on the NHS – whose family knows more than most how important it is, who knows what it’s like to go to hospital night after night with a child in your arms, knowing that when you get there, you have people who will care for that child and love that child like their own.
“How dare they [Labour] suggest I would ever put that at risk for other people’s children. How dare they frighten those relying on the NHS right now.”
Mr Cameron also took on his critics in the party and attacked those who are turning to Ukip.He said: “I don’t claim to be a perfect leader. But I am your public servant, standing here, wanting to make our country so much better – for your children and mine. I love this country, and I will do my duty by it.”
He warned that a vote for Ukip would help get Mr Miliband into Downing Street and end any hopes for a referendum on EU membership.
And in a bid to shore up the anti-EU wing of the party, he promised his renegotiation with Brussels on the terms of the UK’s membership of the EU would tackle free movement and high immigration from EU states.
He said: “We know the bigger issue today is migration from within the EU. Immediate access to our welfare system. Paying benefits to families back home. Employment agencies signing people up from overseas and not recruiting here.”
However, his speech outraged his Lib Dem coalition partners, who accused him of stealing their policy on raising the income tax threshold to £12,500.
Lib Dem Chief Secretary to the Treasury Danny Alexander said: “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. The Conservatives opposed increases to the tax threshold at the last election. The big tax cuts for 25 million working people in this parliament have only been delivered because of the determination and commitment of Liberal Democrats.”
Meanwhile, Labour accused Mr Cameron of ignoring the cost-of-living crisis. 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.”
TUC general secretary Frances O’Grady said: “If David Cameron were the leader of the trade union for hardworking people, he would be thrashed in his next election for delivering the longest and deepest living standards cut in living memory.”
Union Unite called his comments on protecting the NHS “double talk” and “a sick joke”.
The SNP accused Mr Cameron of betraying pensioners by sticking to his decision to bring in a single-tier pension. Jamie Hepburn, a member of the welfare reform committee, said: “It is typical of this Tory government in Westminster – if they stick with Mr Cameron’s £142 then this falls significantly short of what they had previously suggested and is far below the Scottish Government proposal of what our older people need to live comfortably on.”
But Jonathan Isaby, chief executive of the TaxPayers’ Alliance, said: “This was a positive speech for taxpayers, with tax cuts for the lowest paid and long-overdue relief for ordinary people.”