Taxpayers will keep more of their money, says Hammond

FAMILIES deserve to keep more of their own money to spend as they wish, the Chancellor says today as he warns that high taxes do “terrible damage” to the economy.

The Government will today increase the personal allowance from £11,500 to £11,850. The threshold for the higher rate of income tax will rise from £45,001 to £46,351. Fuel duty remains frozen, while the national living wage is increasing by 4.4 per cent and the state pension by 3 per cent.

Writing in The Daily Telegraph, Mr Hammond recalls his early days in business when Britain was the “sick man of Europe” and the top rate of income tax 98 per cent. He says: “I have always understood the power of lower taxes and stronger incentives to stimulate economic growth.

“And I had plenty of opportunity to witness at first hand the terrible damage that high levels of taxation caused to our economy: lower investment, fewer jobs, less pay. And I saw that high rates of tax actually led to less tax being raised.

“I knew instinctively back then that if Britain wanted to shed its ‘sick man of Europe’ reputation and unleash our nation’s true growth potential, we would have to make radical changes – first among them slashing taxes on incomes to a level that gave to workers an incentive to work, and to entrepreneurs the incentive to take risk.

“But I did not know then that I would have the opportunity as Chancellor of the Exchequer to carry on the important work of ensuring that people keep more of the money they earn.”

Mr Hammond says that the Government must ensure taxes remain low while the national debt is paid off. He adds: “Jeremy Corbyn and John Mcdonnell have announced plans that would see debt spiral to more than 100 per cent of GDP, leaving our economy vulnerable to shocks, forcing us to waste billions more on debt interest and handing the next generation an unmanageable burden. Taxes on families and businesses would rise to their highest level in peacetime history – with ordinary working families left to pay the price.

“Contrast that with the Conservative commitment to building an economy fit for the future based on sustainably rising living standards, low taxes, falling debt and investment in a future we can be proud of.”