Jeremy Hunt’s 'dirty dozen' stealth taxes will hit Britons by £800 per household, Labour says
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Jeremy Hunt’s Autumn Statement contained a “dirty dozen” stealth tax rises worth £800 per household, analysis shows.
Labour said that 12 changes made by the Chancellor - including freezing income tax and National Insurance thresholds - will collectively net an extra £23 billion of revenue for the Treasury.
In last week’s statement, Mr Hunt said his decision to cut National Insurance by 2 percentage points and make “full expensing” for businesses permanent amounted to “the biggest package of tax cuts to be implemented since the 1980s”.
However, the tax burden is still forecast by the Office for Budget Responsibility to hit a post-war record of 37.7 per cent of GDP by 2028 - mainly because of a decision taken by Rishi Sunak to freeze key tax thresholds.
When combined with high inflation, the freeze has resulted in millions of people being dragged into higher tax bands in a process known as “fiscal drag”.
Stealth taxes
According to new analysis by Labour, the Autumn Statement contained no less than 12 stealth tax increases.
As well as freezing income tax and National Insurance thresholds, the Government plans to hike vehicle excise duty in April, while council tax bills are forecast to rise by almost £13 billion over the next five years and the individual savings account (ISA) tax-free limit has been frozen.
Many companies have been excluded from a business-rate freeze, and there has been an increase in tobacco duty and the freezing of bands in gaming duty.
The UK Emissions Trading Scheme will be expanded to include more sectors, environmental levies have increased, and thresholds in inheritance are also frozen.
Labour said the Government would benefit from a “fuel duty windfall” by delaying its plans to ban petrol and diesel cars.
‘Picking working people’s pockets’
Darren Jones, the shadow chief secretary to the Treasury, said: “While the Chancellor sold his Autumn Statement as a generous reward, look at the small print and it’s a Trojan horse packed with stealth taxes.
“After 13 years under the Tories, growth is on the floor and the public finances are in a mess. The Chancellor has resorted to picking working people’s pockets to foot the bill of the Government’s economic failure.
“As always with the Tories, they will say one thing and do another, incapable of being honest with the public about their plans.”
According to separate analysis by the Liberal Democrats, the decision to hold down tax-free limits on ISAs since 2020 rather than increasing them in line with inflation has proved particularly lucrative for the Government, with the freeze forecast to cost savers £755 million by 2029.
The freeze considerably outweighs other changes announced in the statement that are expected to help savers to the tune of £50 million.
Tax rises and raids
Sarah Olney, the Lib Dems’ Treasury spokeswoman, said: “This is yet another act of deception from an Autumn Statement that was packed full of tax rises and raids on people’s wallets.
“The statement was all about taking money out of people’s pockets to pay for this Conservative government’s crashing of the economy.
“Their mismanagement of the public finances is now having real consequences for those trying to get on the housing ladder and fulfil their dream of owning a home.
“This Conservative government has denied them that opportunity and it adds insult to injury for working people that ministers cannot be honest about it.”
Despite the criticism, the Conservatives said that a Labour government would increase taxes further.
A Tory source said: “Labour are living on another planet. They can’t pledge to borrow £28 billion a year for a Net Zero splurge and then promise to cut taxes too.
“Labour should just be honest with people - their borrowing binge will mean higher taxes for working people.”
Personal tax rate
A Treasury spokesman said: “We have just introduced a tax cut for 29 million working people worth £9 billion a year, meaning that personal taxes for the average person are lower than every other G7 country.
“People working as nurses, teachers, police officers could see gains of hundreds of pounds a year after the cuts to National Insurance and since 2010 we’ve increased personal tax thresholds to take 3 million people out of paying tax altogether.
“Alongside this we’ve introduced full expensing, the biggest business tax cut in modern British history worth over £50 billion over the next five years, and a business rates support package that will support businesses and the high street.”
Addressing the criticism about ISAs, the spokesman said: “The Government is committed to incentivising greater saving and investment, to help hard working people save for their future goals and build greater financial resilience and around 90 per cent of people pay no tax on their savings income.
“The current ISA limit is appropriate for most people, with the average saving being around £5,700 across all ISA types. Raising the ISA subscription threshold would only benefit a very small number of better off savers.”
