During the Conservative Party Conference, which took place last week, the Chancellor put forward a number of pledges with regards to the government’s five year spending plan. Some key points include:
The Chancellor stated that he wanted to make the UK the first major economy in the world to end low pay altogether, aiming to raise the National Living Wage (NLW) to £10.50 by 2024. The current NLW is £8.21 for those aged 25 and over. He also pledged to lower the qualifying age from 25 to 21. At present, the NLW for people aged 21 to 24 is £7.70. To raise it to £10.50 could be considered a substantial increase.
While making no concrete promises, when asked about Inheritance Tax (IHT) The Chancellor stated that he understands the arguments against it. He explained, “You pay taxes already through work or through investments and your capital gains in other taxes, there is a real issue with then asking them to, on that income, to pay taxes all over again.” Currently, those with estates worth more than £325,000 could pay a standard rate of 40% IHT on anything over the threshold, depending on the nature of the estate assets and available reliefs.
The Chancellor pledged to allocate £25bn to the strategic road network over the next five years, building more roads and reviving local bus services. He also promised to inject a further £5bn into the modernisation of the UK’s digital communications network. This includes rolling out full fibre broadband and the 5G network. Javid stated this would be the biggest increase in infrastructure investment by the government that this country has ever seen.