(Informal notes – without prejudice- CPF Eastern Region Workshop 26 June 2025
CPF
RENEWAL PROGRAMME
EASTERN REGION WORKSHOPS
Thursday 26 June 2025
Making Work Pay
Without Prejudice
Introduction
The Workshop felt that we must have a plan that is imaginative, radical and courageous to see an end to the flat lining of the U.K. economy.
New ideas required to change the orthodoxy to an economy that gives incentive to make work pay and bring about prosperity to all our citizens
We are the 6th largest world economy and as such we should be adopting policies to get us out of a culture that allows a large proportion of our potential workforce to be on benefits. If we don’t we will possibly loose that status and with that our credibility to maintain our borrowing.
The need for a smaller state, less regulation and bureaucracy, less public spending.
We are in an ideology of high taxes and public spending. These are principles that have to be reversed under a new Conservative Administration.
We need to create educational needs that will cover all eventualities. University for some but for others training to a level where they can display both practical and educational experience
Summary
The following are issues raised at the workshop including – tax rates and the thresholds, childcare costs, cost of living in general, VAT, the impact of the state welfare costs, pay to reflect the value of skills, dissatisfaction with public sector pay strikes, small firms no incentive to grow, no incentive for buying a house. Greater emphasis needed on apprenticeships and especially training for high technology activity in our modern society
We need to be saying this NOW before others claim to bring about a radical transformation
Tax Rates and Thresholds
The current policy is for the tax thresholds to be frozen until 2028 – a policy introduced by a Conservative strategy and extended by Labour. It is in some ways a stealth tax as when salaries and income annually increase some earners drop into a higher tax band. ( unverified figures of an increase of £50bn have been gained by the Exchequer under this tax policy) Although the thresholds reflect the current dire problems faced under the present U.K. economic plan it was felt that the Party should be courageous for the future.
Current Income Tax in England and Northern Ireland
The Thresholds have been frozen and it appears that will continue. It is not aspirational for those who earn more and move into the next tax band.
* Basic Rate
- £12,571 – £50,270 at 20%
* Higher Rate
- £50,271 -£125,140 at 40%
Additional Rate
- Over £125,140 at 45%
Increase the Basic Rate
It was felt that the Basic Rate should be changed so that the lower threshold should be increased to £20,000. (This would assist groups to have more take home pay in their pockets – the low paid where those on minimum wage working a 37.5 hour working week would see their tax deductions reduced as would pensioners). It would also affect all higher tax payers. In many ways this is a psychological situation
Low Paid on minimum wage
- under 18 / Apprenticed – £7.55ph x 37.5 x 52 = £14,715 per year
- 18-20 years – £10.00ph x 37.5 x 52 = £19,500
- 21 + years – £12.21ph x 37.5 x 52 =£23,809
By increasing the basic tax threshold some low paid on minimum wages and pensioners could be taken out of paying tax. This needs to happen otherwise the culture of “why go to work” will continue to increase.
- childcare often cancels out wages
- Cost of commuting to work must be calculated
- Low wages in rural and coastal areas a serious issue
- Second earners (often mothers) lose benefits with increased pay. No incentive to do any work taking into account child care costs
- Part time jobs providing flexibility affecting carers and single parent families are needed on all the above issues.
Cost of Living
Cost of Living issues such as food, fuel (vehicle and residential), increased mortgage rates. Child care (where tax incentives could be offered) and other cost of living increases. All these affect every person earning a wage in the U.K. and should be highlighted for attention by an incoming Conservative Administration. The use of fiscal measures to be thought through
Time to Inspire the Middle Income Earners
Our objective is to inspire all employees including the middle and higher income earners to feel that the Conservative Party is looking after them demonstrated by a radical change in all the tax thresholds.. We have to be aware that those income earners require incentive to take more responsibility and their remuneration to level upwards. That requires an increase in the Thresholds to put more cash in their accounts.
Millionaires Leaving the U.K.
We have seen that millionaires are leaving the U.K. (it is reported some 15,000 + since the non dom policy has been implemented) we should commit to reverse that policy
Higher Earners and Professionals
In addition we have to consider the situation of the higher middle and professional income earners – many are having to cope with the cost of living crisis.
These employees will be high paid professionals with expert knowledge in management, professionals in their specific profession, in technology, industry etc. and those employed in Research and Development. Some will be in the public sector.
Competing with employees from other countries
We currently see highly trained U.K. citizens competing for placements with those coming from other countries. This may result in temporary placements with visa applications and fiscal exemptions (NIC) which disproportionately penalises U.K. employees.
If they have no incentives this group of U.K. employees will leave the U.K. (This issue affects all ages)
The Upper Tax Threshold to Increase
(The upper tax threshold rate should be increased from £125,140 to £140,000 putting them in the 40% tax band).
Future Tax Thresholds
Overall there should be a long term strategy to fulfil our objective to reduce taxation which could commence by reverting to more than the current bands mentioned above (20%-40%-45%) but adding the rates as follows 15%-20%-30%-40%-45%
It is on record that when personal income taxes are low the productivity of the nation improves. Tax revenue increases as more people are working
A Conservative government should set out a plan to achieve that objective by amending the tax thresholds.
Other proposals are discussed here
National Insurance Contributions
The Party should commit to reversing the increase in the employers contribution as this has proved to discourage new employment and shown employers divesting of their current workforce.
Investigation should take place to scrap the NIC payments (as was whispered during the dying days of the previous administration but with no detailed analysis) and replace with an actuarial pension scheme by reviewing the voluntary auto enrolment pension scheme which could in time include both private and public sector employees. This would wean the bill for pensions off the Welfare State budget and cease the cost of pensions being paid from exchequer funds. In other words a radical change in which pensions are controlled using actuarial and investment systems.
The pension issue to be fully analysed to provide all participants with an adequate pension according to the payments put into the scheme. Actuarial predictions demonstrate that to avoid pressure on the welfare state contributions by both employee and employer will have to increase. This should be addressed now
Public sector pension schemes could be merged into this operation
Spending on the NHS and Welfare State
Clearly funding of the NHS is a major spending commitment. A separate Paper will address this point however one of the issues covered in this Paper is whether tax devolution might be considered in each nominated area of the U.K. (regional, area, unitary council, mayoral responsibility). Social care could also be addressed under that strategy
This would not prevent the case for the “safety net” provision in welfare benefits
Flat Rate Tax
The Party should examine whether a flat rate tax would bring in sufficient funds to cover overall expenditure in a slimmed down Public Expenditure Plan (This might be a long term analysis once public spending has been brought under control).
Would it be a fairer system where everyone pays some tax (demonstrating that nothing is for free). That it is better to be working as against living on benefits
Local Government Devolution
If more government devolution takes place with the creation of County Unitary Councils (some under a Mayoral tenure) we should consider whether to create a devolved tax system CALT (County Alternative Local Tax). This could be established as part of the levelling up process whereby residents would have more democratic say in spending on health care ( integrated care groups), education, social care, roads and infrastructure. This would create a more democratic and transparent process
Investment Zones
The Party should reset the creation of Investment Zones. As soon as possible we should commence to better inform Conservative Councillors and Members of Parliament (many of whom have never worked in a business never mind actually managed one) so that they are aware what the objective is in creating such Zones. This policy was tried under the previous Conservative government but both Councillors and local officials in many Councils did not seem to understand the process.
Reducing the State Spend
The Welfare State has grown out of all proportion from its original intention to act as a safety net for those in great need. The number of people receiving sickness and disability benefit has to be reduced. We are looking at 2.8m (and increasing) on these benefits and a further 9m + who are inactive – some of them not seeking work or education.
It has become an out of work employment tool.
Using Artificial Intelligence
Most benefits are online applications and some are independently sanctioned. Does the DWP know exactly who is receiving all these individual benefits and therefore an AI software scheme should be created to find out. This could be piloted in separate regions and run on an outsourced basis from DWP. Specific trained staff to undertake the Research and Analysis.
A similar system should be organised to identify all employees on the NHS payroll
Public Sector Pensions
The pension bill for public sector employees is very expensive and with an ever increasing number of employees in the public sector their pension position has become unsustainable
All the more reason to have a radical examination of how pensions are calculated, contributions made and paid out
We need to identify the contracts of all staff on the payroll who qualify for a pension.
We need to examine the difference in the cost of state public employee / employer pension contributions being set aside compared with those for the private sector. We cannot continue to increase the public sector workforce pension payments. We should examine how to equalise that position. The cost of pension provision together with public sector pay demands is not transparent.
The figures that follow demonstrate this future dilemma showing the difference in contributions
Employee. Employer
| NHS (Doctors) | 5.1% – 13.5% (tiered) | 20.7% | Defined Benefit (CARE) |
| Civil Servants | 4.6% – 8.05% (tiered) | 26.6% – 30.3% | Defined Benefit (CARE) |
| Teachers | 7.4% – 11.7% | 23.68% | Defined Benefit (CARE) |
| Police | ~13.78% | 31% |
The auto enrolment pension scheme requires the employee to contribute 5% – the employer 3% and the government 1%. It is thought that these figures will have to increase to cater for a longer period of each person to receive an adequate liveable pension.The whole subject of financing pension needs to be addressed otherwise we will face a pension crisis.
Small Businesses
Under current taxation rules ( – NIC – VAT – apprenticeship training ) the Workshop felt that the following could be considered
National Insurance Contribution – NIC –
There is no incentive for small businesses to grow their business and take on extra staff. The qualifying staff number relating to exemption from NIC could be doubled
Alternatively introduction of tax rebates to micro employers who hire new staff should be examined
VAT registration
Small business are the cornerstone of a prosperous society. Many currently operate on a small profit margin many close to folding up and where increased costs are driving them to close. We only need to look on the high street in towns and villages.
The VAT registration stands at £85,000 this provides no incentive to grow a business. If VAT is charged once the registration figure is reached and they cannot afford to increase employee numbers and are required to increase the cost of their products the whole business becomes economically counter productive.
The Registration figure for VAT should be increased to £150,000
This would act as an incentive to extend business opportunities creating employment and a service to society. (See also the comments above on NIC)
Business Rates
This was not discussed during the Workshop but business rates are the blight of many businesses and should be examined
Housing – Building Houses
More incentives should be brought forward to encourage younger residents to purchase a property as against renting. This would see the development of a society of home owners saving for their future retirement. Finance will come from the private sector.
Council and private renting is a problem for the future where they have to continue to pay rent after retirement. [ See the results of our Housing workshop ]
In order to incentivise the work force to aim for a better life – something that many wish to achieve – there has to be a different thinking towards building houses. This means that throughout society we have to adopt a different ideology.
Building houses has to cater for those with lower disposable income and provide them with incentives to purchase a property as against falling into the Council House renting trap .
This could include tax incentives such as reintroducing the MIRAS scheme (Mortgage interest relief at source). The qualifying figure could be capped but it would act as an inspiration to buy, take on a mortgage and see some form of tax break,
Mortgages could be designed for new buyers to have interest only schemes for an initial 5 years. This would have no affect on the Exchequer nor the profits of mortgage lenders (other than an increase in buyers paying interest.
Skills for the Future
Vocational Training
Vocational skills have not been prioritised and many students have been encouraged into taking a University Degree. Many leaving university with a large debt yet are not able to get immediate jobs that they expected. This will become even worse as positions become robotic.
University is not for everyone and entering into a job under an apprenticeship or in work training provides incentive to undertake work for pay. In today’s culture wages can be extremely good for a well trained tradesman or woman and technical education should be offered.
Employers should be encouraged to offer incentives to young employees to harness competent and aspirational objectives. Good terms and conditions of employment, fairness in the workplace and schemes for employees, such as holidays, sickness benefit, Parental leave, maternity leave and crucially ability to join a well funded and actuarial managed pension fund
Technical Subjects
The Conservative Party should champion more designated courses with subjects to cater for skills for the future. These should be tailored and designed to explore consultation with all levels of business and the public sector finding out what skills will be in demand.
To mention some:-
- Digital literacy, coding, and cyber security
- Health and social care qualifications
- Skilled trades (plumbing, electrical, construction etc.)
- Working in the health service
The high technology sector that confronts us has become a priority and employees will be required to take on these employment roles in order for the U.K. to remain a leader in this technological experience. In a fast moving environment we must educate and train for future technology changes
AI will transform many industries and robotic systems will be to the fore. In addition sectors such as the NHS, local and national government will move towards more technologically based information.
Another important area where technology will become essential is in the Armed Forces where we must equip young men and women to undertake a different style of employment and potential active service.
These young people need to be well trained either through technology systems or educational facilities. In addition being offered a contract in our Armed Services (not conscription) but a well founded career in an important sector of our society. With a policy for 5% of GDP to be allocated employment prospects increase.
In other walks of business those undertaking an apprenticeship should be given extensive training not just on skills to do the job but on a specific level of technology and management.
- Employers should have better access to local schools and colleges. Non university courses require better funding
- To much focus that university is the only way forward to getting a well paid and satisfying job demonstrating that a person with experience and practical knowledge can be productive and a high earner.
- Create job experience schemes for young people to identify their chosen career
Our future depends on well trained skills being indigenously catered for as against having to seek external expertise. This becomes an issue when immigration Visa applicants are awarded on a temporary basis under trade agreements (No NIC for 3 years). This can affect middle income earners who want to seek advancement but the vacancies have become crowded.
We should plan for the future
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Interesting article for information
Davida Ademuyiwa
Wilfred Aspinall
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