Hunt forced to delay tax giveaway decision
JEREMY HUNT will leave a decision about whether to cave in to pressure from Tory MPs over tax cuts until the ‘last possible moment’ before next month’s Autumn Statement in the hope that he will receive more positive projections about the state of the economy.
The Chancellor, who will deliver his statement on November 22, has spent the past week poring over figures produced by the Office for Budget Responsibility to assess whether he has any scope for giveaways such as a change to stamp duty rates.
But Treasury aides say that his hands are tied because any measures have to be ‘both affordable and not inflationary’, which rules out changes such as income tax cuts.
A Whitehall source summed up the dilemma by saying: ‘Based on the current forecasts we can do f*** all, but we are hoping to high heaven that will change in time.’
There is mounting opposition to the Government’s ‘stealth tax raid’, with economists calculating that its freeze on tax thresholds could raise up to £75billion a year in total by 2027-8 – including from pensioners. Tory MPs have warned that Labour’s Sir Keir Starmer has ‘stolen the Conservatives’ clothes’ by saying he would like to cut taxes, while the Government imposes the highest tax burden for 70 years.
The rise in the state pension, ensured by the triple lock formula, means millions of the least well-off Britons face paying income tax on their state pensions within a few years. Caroline Abrahams, charity director at Age UK, said it was ‘absurd’ that the Government was giving increases to poorer pensioners with one hand ‘then taking some of it away with the other’. ‘We hope that the Chancellor will decide to raise the income tax threshold soon.’
A Treasury spokesman said: ‘Pensioners whose sole income is the new state pension and have not deferred or receive protected payments do not pay any income tax, and this year we provided the biggest-ever cash increase to pension payments, a 10.1 per cent rise. Our tax burden remains lower than any major European economy – by raising personal thresholds over the past decade we have taken three million people out of paying tax altogether.’
Chancellor urged to help downsizers: Pages 16-17 Stealth tax to trap millions of pensioners – Financial: Page 79