The Liberal Democrats have proposed £17 billion in income tax cuts, increasing the tax-free personal allowance and easing higher-rate tax thresholds. Sir Ed Davey said the measures would depend on closer ties with the EU, including joining the single market and a customs union, placing further pressure on Labour as other parties promise tax reductions.

The allowance would rise from £12,570 to £15,000, taking 2.5 million people out of income tax and saving millions up to £680 annually. The plans would also remove 760,000 people from the 40p tax band, but most reductions would not take effect until later in the next parliament and would be funded by expected economic growth from improved EU trade links.