London (Parliament News) – Chancellor Jeremy Hunt confirms the six-year freeze on income tax thresholds until 2028, likely leading to higher tax payments for many. Both parties rule out VAT, income tax, and national insurance hikes.
Jeremy Hunt has verified the six-year income tax threshold freeze, which extracts millions into paying higher rates, will last until 2028. The chancellor’s words on what has been Britain’s biggest tax climb on incomes in at least 50 years show space for Labour to follow suit, suggesting that taxes are likely to go up no matter who wins the election.
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It came as both the Conservatives and Labour ruled out raising VAT, income tax and national insurance, in what a leading economics expert expressed was a move that risked limiting the chances of a future government. As his party established its first poster of the campaign, seeking to portray Keir Starmer’s party as one that would tax labouring families, Hunt claimed the “real choice” in the election was between a Tory party that desired to bring down the tax burden and a Labour party that would maintain taxes as they are.
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However, an aggravated chancellor suggested the BBC was at threat of breaching its impartiality when the BBC Breakfast presenter Charlie Stayt connected the increased mortgage rates that were hitting households to the mini-budget of the former prime minister Liz Truss. “I really would question you, and I know the BBC is fiercely impartial, on making a statement as you’ve just said because if the higher mortgage rates were as a result of Liz Truss, why is it that living standards have fallen further in Germany or Austria or Sweden?” stated Hunt.
“The reason why we’ve had 11% inflation and interest rates had to go up is because of [the Russian president, Vladimir] Putin’s invasion of Ukraine and a global pandemic.”
Both parties persisted in trading blows on economic policy on Thursday ahead of the takeoff of their manifestos.
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The shadow chief secretary to the Treasury, Darren Jones, refused to say whether Labour would unfreeze tax thresholds in government. He also rejected his party had been “bounced into” ruling out VAT upgrades because of Tory commitments.
“We’ve been very, very clear – even before the election was called – that we want the burden of taxes to come down on working people,” he stated. “That’s why we’ve funded the last two cuts to national insurance and why we’ve been constant in saying we have no plans, no expectations to increase taxes on working people.
“Of course, I would love to do lots of other things that cost lots of money, but I can’t because the Conservatives have slammed the economy, debt has gone through the roof, the cost of the national debt is a huge load on the Treasury.”
He also argued the UK’s economic sufferings began during the austerity period that “failed to get transition back into the economy” and before war broke out in Ukraine. 2022. Paul Johnson, director of the Institute for Fiscal Studies (IFS), stated it was unclear what both groups had in mind when they ruled out increases in income tax
“We know. It is baked into the numbers that rise in income tax are happening over the next three years, because thresholds and budgets are being frozen and that is a significant tax climb over the next few years, so you can find more ways of getting money out of these taxes without raising the rates,” he stated.