UKIP conference: Income tax cuts plan unveiled

The UK Independence Party has said it would cut income tax from 40p to 35p for people earning up to £55,000.

At its party conference, UKIP will also promised to raise to £13,500 the amount people can earn before paying any income tax.

In a plan to win the "blue-collar vote", Nigel Farage's party pledged to fund the changes by leaving the EU and cutting UK foreign aid by 85%.

Mr Farage said he expected UKIP to have "real influence" after the election.

He told the BBC it was important that people thinking of voting for UKIP knew what his party would be "fighting for" in the event of a hung Parliament next May.

Mr Farage addressed an estimated 2,000 activists at the conference at Doncaster Racecourse - which is near Labour leader Ed Miliband's constituency.

Mr Farage was expected to make a direct appeal to Labour voters, claiming the opposition has failed to stand up for the people it was founded to represent.

Tax cuts

At present the tax-free "personal allowance" applies for income up to £10,000, then a "basic rate" of 20% is paid on earnings up to £41,865.

The 40p rate is payable on income from £41,866 to £150,000, with the "additional rate" of 45% paid on anything over £150,000.

Under UKIP's plans, everyone earning between about £44,000 and £55,000 would pay income tax at 35p. Those earning more will pay 40p, with the additional rate scrapped.

Analysis

By Ross Hawkins, political correspondent

Eight years have passed since David Cameron dubbed UKIP's members fruitcakes, loonies and closet racists.

At their conference a man hands out free fruitcake, as a reminder.

You could almost believe nothing had changed.

Almost.

But MEPs mix with defectors from other parties here. Lobbyists buttonhole members. Rumours of another defection swirl.

They discuss the chances of troubling Labour in the coming by-election in Greater Manchester as much as they worry Conservatives in Clacton.

Still they style themselves as political outsiders: a powerful pitch to voters fed up with the other parties.

Rival politicians don't tend to insult UKIP members any more.

But the party that insists it's nothing like the others doesn't want voters to forget their jibes.

Mr Farage said the tax changes would cost £12bn but it could be paid for by the UK leaving the EU, cutting back the foreign aid budget and not going ahead with the HS2 rail link.

"It is a lot of money, I agree," he said. "But there are a range of measures there that would more than cover these tax cuts. We are not promising the earth because it [the policy] is costed.

"We have argued for many years that people on low salaries shouldn't be paying tax because it is a huge disincentive to come off benefits and because their living standards are going down each year because of the increase in prices.

"By pushing for this hard, I would not be surprised if one or more of these parties adopted this line and we helped to shift the agenda."

UKIP economy spokesperson Patrick O'Flynn said the party wanted to reform the Barnett formula, which is used to calculate benefits per head given to people in Scotland, Wales and Northern Ireland.

"By reforming the Barnett formula, which so unfairly discriminates against English taxpayers, you can save several billion," Mr O'Flynn said.

Parliament recall

Mr Farage has claimed it is not inconceivable that the party could hold the balance of power in the event of an inconclusive general election result.

Douglas Carswell and Nigel Farage will both address the conference

Although it is not represented at Westminster at the moment, UKIP is hoping to get its first MP next month in the Clacton by-election on 9 October.

The Clacton vote was triggered by the defection to UKIP of Conservative MP Douglas Carswell, who resigned his seat to stand for re-election.

Mr Carswell will speak at the conference later, as will John Bickley, who will run for UKIP in the Heywood and Middleton by-election to be held on the same day.

Mr Farage has said the recall of Parliament on Friday to discuss air strikes against Islamic State militants in Iraq was scheduled to upstage the start of UKIP's two-day conference. He said Prime Minister David Cameron would "do anything he can to try to deflect attention away from UKIP".

Philip Collins, chair of centre-left think tank Demos, said UKIP's stance was "absolutely bizarre".