Saturday, 27 Nov 2021

Rishi Sunak stealth tax: Thousands forced to pay more under Chancellor’s Budget plans

Budget 2021: Tax rises slammed by Andrew Neil

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The Chancellor’s spending plans are set to increase the number of people paying the 40p tax rate to 1.3 million. A freeze on the income tax thresholds means hard-working Britons will see themselves dragged into path more in the coming years.

Wage rises due to inflation will artificially increase pay, meaning many will be left off by the failure to increase the tax threshold by the same rate.

According to the Institute for Fiscal Studies 8.5 percent of UK adults currently pay the higher rate of tax.

By 2024-25, they say that figure will have risen to 11 percent.

Since 1990 the number of people paying the rate will have tripled from just 3.8 percent.

The so-called “fiscal-drag” pulling more people into paying more comes as the tax burden stands at its highest point in 50 years.

Government debt due to the pandemic is at its highest rate in decades.

At the same time, the spending commitments outlined in Mr Sunak’s Budget on Wednesday put Government spending at sustained levels not seen since the 1970s.

Yesterday the Chancellor vowed he still wanted to lower taxes as soon as possible.

He told Sky News: “My ambition is to lower taxes for people, that is what I would like to do as Chancellor.

“We had to take some corrective action as a result of the crisis and the response we took to it.

“But, hopefully that now is done and, as we demonstrated yesterday, our priority is to make sure that work pays, that we reward people’s efforts and I’m delighted we could make a start on that yesterday.”

He also promised Tories on Wednesday night in a private meeting of backbench MPs that he hoped to be able to lower tax before the next election.

A number of Conservative MPs have been left concerned by Mr Sunak’s Budget commitments.

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One worried MP even went so far as to call it “socialist” when speaking to Express.co.uk.

Shadow Treasury minister Pat McFadden last night said it was now clear the Conservatives “have become the party of high taxation because they are the party of low growth”.

The Labour MP said: “The standout feature of this Budget is the Chancellor’s admission that tax levels are set to rise to their highest levels since the early 1950s.”

“One tax rise after another.

“A new analysis today showing that the combination of these tax rises are set to mean a £3,000 per household increase compared to when the Prime Minister came to office.

“And the reason for all these tax rises is simple: the Tories have become the party of high taxation because they are the party of low growth.”

MPs will debate the Budget in the Commons until next Wednesday.

The tax and spending measures proposed by Mr Sunak will then be put to a vote for Parliament’s approval.

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