Cut taxes to end the cost-of-living crisis

It would be easy to assume that the only way to cut taxes is to slash benefits.

While Reform and the Tories have been squabbling over which disabled people should have vital support taken away, the Liberal Democrats have unveiled a new plan – one that doesn’t target the most vulnerable in society, and that doesn’t scapegoat people who need support.   

There is no way to end the cost-of-living crisis without cutting income tax. Alongside a broader package of changes including halving energy bills and delivering social homes, we recognise that the freezing of tax thresholds needs to be ended.

Liberal Democrats would raise the tax-free allowance to £15,000, taking another 2.5 million of the lowest paid out of income tax completely.

For years we have also become used to tax thresholds being held back, a stealth tax which has seen wage increases eroded by inflation and tax, leaving people feeling no better off.

So, in addition, we would raise the higher rate threshold to £56,000 to help those paying the 40p rate, a number which has ballooned from two to nine million people.

According to the Office of Budget Responsibility, if nothing changes, that will rise to one in four being dragged into the higher rate by 2031, compared to one in seven thirty years ago.

While, of course, public money must always be spent wisely, the myth that disabled people can manage on less and that older people don’t need decent pensions is exactly that – a myth. 

We can deliver tax cuts instead by sparking sustainable economic growth, growth that provides employment, opportunities for trade, and a fundamental reset to our economy.

A new Growth and Defence Partnership with the European Union will make the UK richer, safer and stronger.

It is our answer to a stagnating economy which has driven us down the path to over one million 16- to 24-year-old ‘NEETs’ (Not in Education, Employment, or Training) and forced working people to bear the load of a record tax burden.

We have an opportunity to reverse years of damage to our economy and the future of our nation by charting a path back to being part of the European Union with concrete steps today including joining the Single Market and a UK-EU Customs Union. 

The failed Brexit deal cost us £90 billion in tax revenue in 2025 alone; it simply cannot go on like this.

While the Conservatives and Reform reach for cuts to disabled people's support, rather than growth, they forget that the biggest barrier to growth is the one they left us with.  

The Conservatives negotiated the Brexit deal which ripped us out of the Single Market and Customs Union while Nigel Farage spent decades campaigning for it.

Having sold Brexit to the country as the answer to everything, neither can now admit it has failed without admitting their own part in that failure.

By building our new partnership with Europe, not only can we reduce the tax burden on working people, but we can also invest in defence and deliver radical change to social care which continues to cripple councils across the country.

The Prime Minister is finally talking the Lib Dem language of a free personal care entitlement.

That cannot be another cost burden on working people, but rather funded by an ambitious growth plan, one which a reset with the EU can deliver.

Working with our closest neighbours and biggest market, we can deliver growth, security, and a tax cut for working people.