Labour And Tories Accused Of 'Stitching Up' 9 Million With Stealth Tax: 'Rank Hypocrisy'

Chancellor Rachel Reeves is expected to freeze tax thresholds in the Budget.Both Labour and the Conservatives have been accused of “stitching up” nine million taxpayers by freezing tax thresholds.Labour chancellor Rachel Reeves is set to unveil her second Budget on Wednesday, where she will need to hike up taxes or cut public spending in order to fill a £20 billion hole in the public finances.While the details of the biggest financial announcement of the year will not be confirmed until she sets them out in parliament, Reeves is widely expected to freeze the tax thresholds at which income tax and higher rates of income tax start to apply.This is often referred to as a “stealth tax” because inflation means taxpayers end up being dragged into a high tax bracket, even if the actual value of their salaries remains the same.Labour pledged in their 2024 manifesto that they would not increase taxes on working people, referring to income tax, national insurance contributions and VAT.A “stealth tax” would not technically breach those commitments.Prime minister Keir Starmer has also failed to rule out introducing such a policy when questioned about the issue.Meanwhile, the Conservatives froze tax thresholds after the pandemic up until 2028.According to earlier reports from Sky News, Reeves is not expected to extend that freeze for another two years beyond that – raising about £8 billion.Analysis from the Liberal Democrats – based on figures from the Office for Budget Responsibility and research from the Commons Library – has found that if the chancellor goes ahead with this decision, an extra 1.3 million people will be dragged into paying a higher rate of tax.That comes on top of the 7.7 million who have been pushed into a higher tax band by the Conservatives since 2021.Lib Dem deputy leader Daisy Cooper said: “A staggering nine million people are now set to be hit by the Conservative-Labour stealth tax stitch-up.”Cooper also pointed to Reeves’ comments from when she was in opposition, after she accused the then-Tory government of “picking the pockets of working people” back in 2021.“Rachel Reeves once accused the Conservatives of ‘picking the pockets’ of working people by freezing tax thresholds – now Labour plans to do exactly the same. That’s rank hypocrisy,” the Lib Dem deputy said. “While the two big parties squabble, it’s ordinary Brits who are left footing the bill. “Families across the country are fed up with being milked for their hard-earned cash.”Related...All The Times Rachel Reeves Promised Not To Hike Taxes AgainStarmer Refuses To Say If Labour Will Honour Promises Not To Increase Taxes For 'Working People'Rachel Reeves Blames Brexit As She Prepares To Raise Taxes And Cut Spending

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