Robert Jenrick has set out a Jenrick personal allowance pledge to lift the tax-free threshold from £12,570 to £15,000 in his first budget as Chancellor, should Reform UK win power. The promise, announced in a speech on Saturday to an audience of party members, is costed at £21bn and forms the centrepiece of what Jenrick describes as a mission to ‘choose the worker’.
The proposal does not stop at £15,000. Jenrick said Reform would push ‘step-by-step’ to raise the personal allowance to £20,000 once the cost could be met in full, drawing on a commitment already included in the party’s last manifesto. Party officials say the immediate cut would save the majority of taxpayers around £500 a year and would benefit 40 million people overall.
How the Jenrick personal allowance pledge would be funded
The £21bn cost would be drawn from planned £80bn cuts to government spending. Of that total, £52bn would come through welfare reform, according to the party. Jenrick also said at a fringe event that he would prioritise tax cuts for workers over other areas of the economy, framing the personal allowance increase as the defining test of that priority.
‘There has never, in our lifetimes, been a worse time to be a worker in Britain,’ Jenrick told party members. ‘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.’
The personal allowance is tapered away for those earning between £100,000 and £125,000, a band widely referred to as the ‘tax trap’ for higher earners. Below that threshold, the allowance has sat frozen at £12,570 for five years under successive Conservative and Labour governments, a deliberate decision to raise revenue without a formal rate rise.
Fiscal drag has drawn millions more into higher-rate tax
The consequences of that freeze are now visible in official data. According to Get Surrey, citing HM Revenue and Customs figures, 5.76 million individuals were paying the higher rate of income tax in the 2023/24 tax year. Between 2022/23 and 2023/24 alone, 654,000 people were added to the higher-rate band, a year-on-year increase of 13%. The threshold at which the 40% rate kicks in has been frozen at £50,271 since 2021/22.
This is the mechanism economists call ‘fiscal drag’: as wages and prices rise, more people cross fixed tax thresholds without any formal change to the rates themselves, handing the government a larger share of income by default. Analysis by the Taxpayers’ Alliance indicates around 500,000 more people will pay the basic rate of tax this year, while 410,000 more would fall under the higher rate of 40 per cent as a result of wage growth.
Rachel Reeves announced in her first budget in 2024 that she would keep the allowance frozen at £12,570, despite earlier language suggesting tax bands might rise with inflation during the government’s five-year term. Get Surrey reports that Reeves confirmed the freeze would continue until 2030/31, a commitment that is set to draw further cohorts of workers into tax brackets they would not have entered under an indexed system.
Andy Burnham, prior to taking office, indicated he was open to unfreezing the personal allowance, but later stepped back from the idea on cost grounds. Jenrick’s speech positioned that retreat as a political failure and framed his own proposal as the sharper alternative.
The Jenrick personal allowance pledge is the largest tax cut proposal he has put forward in the Reform leadership race to date. Whether the party can translate the spending reductions needed to fund it into a credible programme will be the question put to it at the next general election, though the party’s officials say the maths holds on the basis of their planned welfare savings.
For the 5.76 million already paying the higher rate, and the hundreds of thousands pulled into it each year by frozen thresholds, the proposal at least puts a concrete number on the table. The next test is whether any of Reform’s rivals choose to match it.
