Starmer Hints at Huge Stealth Tax Extension as Reeves ‘Headroom’ Disappears – Guido Fawkes

Starmer Hints at Huge Stealth Tax Extension as Reeves ‘Headroom’ Disappears

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Starmer was asked at PMQs if he would repeat Reeves’ promise not to extend the freeze in the income tax levy threshold: “In that Budget she said there will be no extension of the freeze in income tax thresholds. Ahead of the emergency Budget will he repeat the commitment that she made?” Easy to answer in theory…

The PM just attacked the Tories with the usual platitudes instead. Sunak enacted the freeze in 2021 and it was extended to April 2028 by Hunt. Reeves said she wouldn’t be extending it again at the budget. The death of growth since then has seen all of November’s ‘headroom’ go poof…

The OBR says the stealth tax will nab £38 billion annually by the end of this decade thanks to inflation and total extra workers to be dragged into the 40p tax bracket are set to reach nine million by 2028. A two-year extension is predicted to hike that by 600,00 and rake in £10 billion per year for the Treasury. The fiscal drag lever is a favourite for panicking chancellors – for example at Spring Forecasts – thanks to it being little-understood. The 40% threshold should be £76,636 by now…