PART D – ECONOMY

Fiscal Prudence

The Heritage Party believes in fiscal responsibility, which means living within our means as a nation. A sovereign nation should not spend beyond its means year after year and decade after decade, as has been the case in the United Kingdom over the last 40 years. 

Taxpayers’ money should only be spent on essential public services and items which benefit the people such as schools, healthcare, the police, the border force and honouring the military covenant, rather than subsidising wind and solar energy scams, foreign aid, migrant hotels and welfare, diversity officers and QUANGOs that provide no benefit.

We must reduce the annual budget deficit to zero and get the nation’s finances back into balance otherwise there will be a heavy price to pay in the future. Countries which consistently rack up debt always end up with a debased currency and/or hyperinflation which disproportionately harms the middle and working classes. 

In the long term, we must aim to reduce our national debt and begin to build up a sovereign wealth fund which can provide a source of revenue for pension funding, rather than operating the state pension like a Ponzi scheme. The government of today must not squander the wealth which has been bequeathed to us from our forefathers. It is our duty to be good stewards of our economy and to leave it as an inheritance for future generations.

Cutting spending to reduce tax and borrowing

The first steps towards fiscal responsibility will be to slash £54.9 billion per annum of unnecessary state spending, releasing £41.6 billion per annum for tax cuts (as detailed in the subsequent section on Low Taxation), and using the remainder for cutting the budget deficit.

Our priorities for slashing unnecessary waste and spending are:

Heritage Party Spending Cuts	Savings per annum (£ billion)
Net zero subsidies	10.0
Migrant welfare	12.0
Migrant hotels	2.1
Other foreign aid (excl. migrant hotels)	10.9
QUANGOs	8.7
Ukraine war	3.0
Diversity officers	0.2
Contracting and procurement	8.0
TOTAL	54.9

Reducing the budget deficit will reduce interest payments on the national debt, and tax cuts will stimulate growth, further funding efforts to reduce the budget deficit, begin to pay off the national debt and build a sovereign wealth fund.

Cutting ‘net zero’

On scrapping the Climate Act 2008 and associated climate alarmist legislation, we will cut all subsidies to unreliable energy (wind turbines, solar panel arrays, etc.), carbon capture and storage and other schemes based on the ridiculous idea of spending huge amounts of money to remove carbon dioxide from the atmosphere. This will save at least £10 billion per annum and potentially much more.

Defunding QUANGOs

The 438 QUANGOs in operation cost taxpayers £391 billion in 2025/26. Just a 3% reduction in funding to QUANGOs will save the taxpayer £8.3 billion per annum.

This will be easy to achieve by cutting all funding to programs that push wokery, immigration and climate alarmism. Such QUANGOs that should have taxpayer funding fully or partially cut include:

Arts Council England
BBC
Channel 4
Commission for Countering Extremism
Committee on Climate Change
Electricity Settlements Company
Environment Agency
Great British Energy
Greater Cambridge Development Corporation
Immigration Advisory Authority
Low Carbon Contracts Company
Natural England
Ofcom
UK Research and Innovation

Contracting and Procurement

The public sector spends an estimated £400 billion a year on purchasing a huge range goods and services from the private sector, including everything from medicines and medical equipment to school textbooks, fire engines, new police cars, road surfacing, building repairs, IT systems and diversity training, as well as huge vanity projects like HS2.

Some of this spending is unnecessary, and some of it can be procured at a lower cost by removing sustainability and diversity criteria. Cutting the procurement and contracting bill by just 2% would save £8 billion per annum.

Further Savings

It may be possible to achieve further savings in government spending by tightening the criteria to receive Universal Credit and Personal Independence Payments, restructuring free childcare payments and reducing employers’ contributions to state-sector pension schemes. Any further savings identified should be used in the first instance to reduce the budget deficit.

Monetary Policy and Inflation

Monetary policy must be responsible. It must not unnaturally inflate asset prices, which create ‘boom and bust’ bubbles that punish ordinary people by devaluing the currency as well as making house prices unaffordable for young people and families. The government should not continually inflate the money supply with Quantitative Easing; previously known as printing money. 

We will seek to ensure that monetary policy works in favour of ordinary British people who want to buy a home of their own, rather than leading to homes being sold off to speculators who often leave them empty further exacerbating an unnecessary housing crisis and hollowing out communities.

We favour a target inflation rate of 0%, which can be achieved by reducing profligate government spending to a point where extra government borrowing is unnecessary, thus ending Quantitative Easing.

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Reducing the Tax Burden

The most onerous tax rises from the Starmer regime need to be immediately reversed along with the disincentives to productivity and marriage which exist in the tax system. Our priorities for tax reduction are: 

Heritage Party Tax Cuts	Tax reduction per annum (£ billion)
Unfreeze Income Tax Personal Allowance	11.9
Restore Income Tax Personal Allowance over £100,000	4.8
Increase Married Couple’s Allowance from 10% to 100%	4.5
Raise Employers’ National Insurance threshold from £5,000 to £10,000	3.3
100% Business Rate relief to pubs, social clubs and live music venues	0.5
Restructure VAT to end the cliff edge at £90,000	0.0
Abolish TV Licence	3.9
Scrap VAT on independent schools	1.5
Scrap VAT on domestic energy bills	0.9
Scrap Inheritance Tax	8.5
Abolish Climate Change Levy	1.8
TOTAL	41.6

Personal Income Tax and National Insurance

We will not increase Income Tax rates from the current rates of 20%, 40% and 45%.

We will end the freeze on Personal Allowance threshold for Income Tax and increase the lower threshold annually in line with the state pension triple lock, so that it increases annually by whichever is the highest of average wage growth, price inflation (CPI) or 2.5%. 

A 2.5% increase in the Personal Allowance would raise it from £12,579 to £14,231 over 5 years, requiring spending cuts that increase to £11.9 billion per annum over a Parliamentary term.

We will end the tapering of the Income Tax Personal Allowance for earners between £100,000 and £125,000 which leads to an unfair marginal tax rate of 60% for earners in that bracket. The Income Tax Personal Allowance should remain in place for all taxpayers.

We will support families by increasing the percentage of Income Tax Personal Allowance that can be shared by married couples with children from 10% to 100%. This means that a single earner in a traditional family of a husband, wife and children will not pay any Income Tax on the first £25,140 of income.

The current rates of employees’ National Insurance are 8% and 2%, and 6% and 2% for self-employed people. We will maintain the income thresholds for paying National Insurance at the same level as those of Income Tax.

In the long-term, Income Tax and employees’ National Insurance rates should be reduced and the Personal Allowance increased further to take advantage of the Laffer curve, both increasing economic growth and tax revenue to the Treasury.

Inheritance Tax

We will abolish Inheritance Tax as a priority. It is a mechanism to destroy the generational wealth of the middle classes. The super-rich do not pay Inheritance Tax as they can avoid it legally. It brings in a relatively small £8.5 billion per year but is one of the most unfair and destructive taxes in existence, taxing assets that have already been taxed before when a loved one has just died.

The extra onerous death taxes imposed on farms and businesses by the Starmer regime by reducing Agricultural Property Relief and Business Property Relief will automatically be scrapped with the abolition of Inheritance Tax.

Stamp Duty

We will abolish Stamp Duty on UK citizens’ primary residences when it is feasible to do so and the £14 billion of revenue from Stamp Duty can be replaced. Stamp Duty should remain for UK citizens purchasing second homes or additional properties. Stamp Duty will not be applicable to foreign citizens as we would remove the right to buy residential property from foreign nationals.

We will not increase Stamp Duty on shares from the current rate of 0.5%

Capital Gains and Dividend Tax

The current rates of Capital Gains Tax are 18% and 24%. 

Dividend Tax is currently charged at rates of 10.75%, 35.75% and 39.75%.

We will assess the feasibility of reducing these rates during the course of the Parliamentary term to take advantage of the Laffer curve and increase revenue to the Treasury.

Consumer Taxes

We will abolish the TV licence.

We will abolish VAT on private school fees and domestic energy bills.

We will assess the feasibility of reducing or abolishing other consumer taxes including fuel duty, tobacco duty, alcohol duty, insurance premium tax, air passenger duty and plastic packaging tax

Local Taxes

We will not replace Council Tax with a Land Value Tax. 

We will scrap all Tourist Taxes, Accommodation Levies, Overnight Visitor Levies and the like that have been imposed by councils in some areas simply for staying the night.

Extra Income Tax payable in Scotland will end automatically on scrapping Holyrood.

Make Tax Digital

We will scrap the requirement for sole traders and landlords to submit Income Tax returns using MTD-compatible software and re-instate the ability to submit returns manually or online without paid software, as it was before April 2026.

We will scrap the requirement for self-employed people and others who undertake tax self-assessment to make 5 reports per year. This has never been necessary before; it is onerous and overly bureaucratic and time consuming, and we will revert to one annual return per year. 

Non-Dom Status

We will re-instate non-dom status for UK residents who are domiciled abroad. It was abolished in April 2025 by Keir Starmer with modelling projections of an extra £2.7 billion of revenue per year for the Treasury. However, this revenue has not materialised; it has had the opposite effect with tens of thousands of high-net worth individuals leaving the country and thus paying no tax in the UK at all.

Qualifying persons should be able to obtain nom-dom status for an annual fee of £100,000, after which they pay tax on their UK earnings but are exempt from paying tax in the UK on foreign assets and earnings.

Employers’ National Insurance

We will increase the threshold for paying Employers’ National Insurance from £5,000 to £10,000 per annum over the term of Parliament.

Corporation Tax

Corporation Tax should be set as low as possible to encourage enterprise and increase overall tax revenues through stimulating economic growth.

Business Rates

Business Rates disadvantage businesses that need physical premises, which have to pay Business Rates in addition to Corporation Tax. We would give 100% Business Rate relief to pubs, social clubs and live music venues, and reduce Business Rates in other sectors when feasible.

VAT

We will end the VAT cliff edge, where small businesses are perversely incentivised to trade less to keep their taxable turnover below £90,000 per annum. This can be achieved without cost to the Treasury by restructuring VAT with a lower threshold and 0% VAT on turnover below that threshold.

Climate Change Levy

We will scrap the Climate Change Levy on gas, electricity, LPG and solid fuel (coal, coke, etc.), saving businesses £1.8 billion per year.

Landfill Tax

The rapid increase in Landfill Tax rates has caused the unintended consequences of an increase in fly tipping and reduction in construction activity as overheads have become unsustainable for some construction businesses. We will reduce Landfill Tax to a level where these problems are alleviated.

Tax Avoidance

Large international corporations with multi-million or multi-billion pound turnovers and profits should pay their fair share of taxation but many exploit tax avoidance schemes that result in them paying less tax than a sole trader. This is unfair and any such loopholes must be closed.

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Capitalism Superior to Marxism

In contrast to free market economies where individuals are free to make their own economic choices, planned economies based upon Marxist ideology have always been disastrous, bringing scarcity, poverty and hunger instead of prosperity, and almost always accompanied by tyranny and oppression as well.

We completely reject the model of ‘Stakeholder Capitalism’ being promoted by the World Economic Forum, which is a mixture of Communism and Technocracy, both of which are totalitarian ideologies that have proven to be failures.

Recent governments have paid lip service to capitalism while implementing socialism by stealth using the concept of the ‘mixed economy’, the ‘third way’ and ‘public-private partnerships’. Governments have excessively interfered in the free market, propping up zombie companies who conform to the latest politically correct ideologies, for example on climate alarmism. Many such companies do not produce anything of value and would collapse without government subsidies. This is unfair to businesses that do not receive government subsidies and is a drag on the economy in the long-term. It is wrong for the state to interfere in the economy in this manner.

Reducing Regulations

Unnecessary regulations should be reduced as much as possible to allow maximum freedom to trade, but well-drafted regulations are necessary to protect workers from exploitation, to ensure that the environment is not damaged, and to ensure a fair and level playing field between businesses of different sizes. Regulations which provide unfair advantages to large businesses and global corporations over small and medium sized businesses should be scrapped.

Removing Price Caps and Sales Quotas

We will end price setting and price capping in the private sector.

We will end all government-imposed sales quotas on the private sector.

Responsible Banking

The banking sector must be regulated to ensure that run-of-the-mill high street is separated from high-stakes high-risk investment banking. Everyday people and small and low-risk businesses should not be exposed to high-risk ventures so that they are protected from systemic adverse events in the banking sector for which they are not responsible.

We will strengthen the current ring-fencing requirements for high street banking to a full Glass-Steagall style Act that achieves this.

Removing the Influence of Climate Alarmism on the Free Market

Climate sales quotas are anti-free-market and we will scrap them all. There should no requirement for car sales outlets to sell a certain percentage of electric cars, or for heating businesses to sell a certain percentage of heat pumps.

We will lift the ban on sales of petrol and diesel vehicles from 2030, and hybrid vehicles from 2035. The free market should decide which cars succeed and fail.

We will repeal the Sustainable Aviation Fuel Act 2026 that interferes with the natural market price of ‘sustainable fuel’ which would not otherwise have any buyers.

The UK Emissions Trading Scheme, introduced in January 2021, will be scrapped along with the Climate Change Act 2008, thus removing an artificial floor in the price of carbon based energy and a total carbon dioxide emissions cap. On scrapping the ETS, there will be no limit on carbon dioxide emissions.

We will end the price cap on domestic fuel bills, and cross subsidies for unreliable energy. This will allow the price of carbon based energy to fall, which will benefit the majority of households, and the price of expensive, unreliable wind and solar energy to rise. Customers who wish to purchase energy sourced from wind and solar may choose to do so, without being subsidised.

We will lift the ban on sales of plastic straws and cutlery.

Separation of State and Private Sectors

There are some sectors which should be wholly owned and operated by the state. These include the armed forces, the police force, the probation and prison services and public roads. There are other sectors which constitute natural monopolies which are at present part-privatised including rail, water and energy. Part-privatisation constitutes the worst of all worlds. Price capping in selected sectors means that businesses in those sectors are not able to operate freely in the market. In order to compensate for this the state then subsidises them for billions of pounds which is paid for by higher taxes. 

The owners and executives of these businesses have all the benefits of government subsidy, but none of the risks which come from making poor business decisions, and this is reflected in the extortionate transport, energy and water prices we are all accustomed to. 

While the vast majority of sectors should be fully privatised, exceptions should be made in the case of natural monopolies that own and operate core national infrastructure. Water, rail and energy companies should be nationalised if they cannot meet their obligations or survive in the free market without financial support from taxpayers: it is not right that taxpayers underwrite all their risks for no reward.

Post Office

The Post Office is a unique and vital service. It should remain in the public sector to ensure that there is a Post Office service in reach of every resident.

Re-industrialisation

Our nation was the cradle of the Industrial Revolution and has a long history of manufacturing. In recent decades, successive governments have run down our manufacturing base, and it needs to be re-invigorated and rebuilt. To this end there must be a move to lower rates of taxation for businesses and an end to net-zero, carbon capping and other regulations which stifle industry and make the UK uncompetitive. 

In exceptional circumstances, the government should step in to protect industrial facilities of national importance such as steel works, oil refineries and aluminium smelters if they are under threat. 

We will keep the steel manufacturing plant in Scunthorpe in the state sector ensuring that its blast furnace remains open and the production of virgin British steel can continue. We shall bring the steel works in Port Talbot into the state sector, re-open its blast furnaces and re-start the production of virgin British steel in south Wales.

We will take control of the oil refinery at Grangemouth and re-open it. We will ensure that the Fawley, Humber, Stanlow and Pembroke oil refineries stay open and continue to operate.  

The ammonia production facility at Billingham should not have been allowed to close. We will act to re-open it.

The aluminium smelter in Fort William must remain open.