Davey promises tax cuts for millions if UK rejoins EU single market

The Liberal Democrats have promised to cut taxes for millions of workers if they become Prime Minister, in a speech to their party conference.

They plan to raise the annual tax-free personal allowance to £15,000 and increase the starting point for paying employee National Insurance (NI) to the same level.

The Lib Dem leader said that if he gained power, he would also raise the 40p income tax threshold from £50,270 to £56,000 in a £17bn package funded by the economic boost he says would come from the UK rejoining the EU single market and customs union.

He claimed the plan would mean a £680 cut for 'most taxpayers' but it would not come into full effect until the fifth year of a Lib Dem government - potentially up to eight years away.

The announcement was greeted with sustained applause by Lib Dem MPs and activists in the Brighton conference centre.

Under the Lib Dem plan, based on research by think tank Frontier Economics, external, the economic boost from rejoining the single market would allow the party to spend £17bn on tax cuts by the end of the next Parliament.

The party says it would unfreeze personal allowances in the second year of a Lib Dem government, allowing them to rise with inflation, before bringing in big tax cuts in year five when the economic benefits of closer trading with the EU had kicked in.

However, the move would depend on the party being able to negotiate a closer trading arrangement with the EU in just 12 months.

Sir Ed has been under pressure this week to set out bolder policies, with his party languishing in fourth or fifth place in national opinion polls.

He began his speech with a sombre and punchy attack on Reform UK leader Nigel Farage.

He stopped short of calling Reform fascists, but drew a link between the fascists in Britain in the 1930s with what he called