Reform UK leader Nigel Farage has stepped up his fight with Labour for working Britons’ votes (Image: AFP via Getty Images)
Nigel Farage last night made a bold bid for the support of working Britons with a promise to scrap tax on overtime as Reform UK battles to oust Labour from Downing Street. People who earn less than £75,000 and have worked a 40-hour week will not pay tax on further hours worked under Mr Farage’s plans for power. Reform unveiled the pledge last night with the claim that Labour is “no longer the party of the patriotic working class”. The announcement of the “hard work bonus” is the clearest sign yet that Mr Farage is intent on taking the fight to Labour after this month’s successes in the elections for English councils and the Scottish and Welsh parliaments. Reform’s pledge to slash taxes for Britons who want to work more hours comes as activists attempt to wreck Andy Burnham’s ambitions to become Prime Minister by defeating him in next month’s by-election in the Labour heartland seat of Makerfield.
Labour has been pilloried for hiking National Insurance on employers and forcing more people to pay income tax by freezing the personal allowance.
Mr Farage said: “I’ve grown increasingly aware of the deep frustration felt by hardworking people who put in the extra hours yet see no real reward at the end of the month. They look around and see that work simply doesn’t pay, that benefits often match or beat what they earn, and that ordinary families are being dragged into higher tax bands with nothing to show for it. Today we’re announcing our bold new policy that will finally make work pay, drive up productivity, and restore the appeal of a strong work culture once again.”
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The party says Makerfield is at the heart of “alarm clock Britain” and claims “nowhere do people work harder than in the former Red Wall”.
It stated: “Reform is now the party of those who work hard but for whom the system no longer works. The hardest workers receive nothing from the Government but eye-watering bills and sky-high taxes. That is why today we are announcing that a Reform Government will end the tax on overtime.”
Reform claims “Britain has spent 18 years since the financial crash failing to close its productivity gap” and argues its policy will “reward the hardest workers”.
Supporters received a major boost this month when Labour lost control of the Welsh Senedd for the first time since its founding. Reform is now the second biggest party in the Senedd and the joint-second largest in the Scottish Parliament. It also won the most seats in the English local government elections, heightening expectations Mr Farage could be prime minister after the next general election.
Farage has made a huge announcement (Image: Getty)
John Longworth, who chairs the Independent Business Network of family businesses, welcomed the “hard work bonus” pledge, saying: “British people are taxed the highest they have been since World War II and under the Welfare Party that is Labour hard work doesn’t pay. This change in tax will give workers an incentive to earn extra and in the process improve productivity. It is a welcome step away from high tax, big state. The devil is in the detail and one would hope that it could also apply to sole traders and family enterprises and will not disincentivise hourly rates.”
Reform expects factory workers who put in an extra 90 minutes a day will “keep £3 extra for every hour of overtime worked” and be more than “£1,000 better off across the year”. It has calculated the policy will cost £5billion a year but it says it has “committed to over £40billion of cuts and savings”.
Reform believes it would have ousted Angela Rayner in a general election (Image: PA)
The party is confident that if this month’s local elections had been a general election, the vote swing would have been enough to oust Culture Secretary Lisa Nandy in Wigan, Foreign Secretary Yvette Cooper in Pontefract, Castleford and Knottingley and Chief Whip Jonathan Reynolds in Stalybridge and Hyde, as well as former deputy prime minister Angela Rayner in Ashton-under-Lyne and deputy Labour leader Lucy Powell in Manchester Central.
Chief Secretary to the Treasury Lucy Rigby accused Reform of making “back of a fag packet plans”.
She said: “This Labour Government is making work pay through successive boosts to the National Minimum Wage and National Living Wage; we’ve introduced sick pay from day one of employment, and improved parental leave. That’s what being on the side of working people looks like.”
Shadow Chancellor Sir Mel Stride, said: “Hard work should be rewarded, which means getting taxes down in a fair and responsible way.”
However, he cast doubt on whether the party could make the tax-free overtime policy a reality, saying: “Reform do not do the serious thinking, which is why they keep promising things they cannot deliver. Only the Conservatives have a clear plan to back working people, get taxes down and deliver a stronger economy through our golden economic rule and £47billion plan for savings.”
Former Conservative Business Secretary Sir Jacob Rees-Mogg said: “Anything that incentivises work is welcome and Nigel is right that it is unfair that people can get more on benefits than from work. However, it is better to simplify taxation and reduce rates than to create new schemes which could easily lead to avoidance.”
Julian Jessop, a Senior Fellow at the Institute of Economic Affairs, warned of “unintended consequences”.
He said: “Many firms already pay higher rates for overtime, and that is a better market-led solution. If overtime is taxed at a lower rate, firms might just reduce pre-tax pay, leaving workers no better off.”
Reform says it will “introduce anti-avoidance rules to stop employers classifying regular working hours as overtime”.