The Labour government under Andy Burnham faces accusations of trapping a million more workers in higher tax brackets through frozen thresholds. Research by the TaxPayers' Alliance reveals that 500,000 additional people will pay the basic 20% rate for the first time as wages exceed the £12,570 personal allowance, unchanged since 2021.
Stealth Tax Rise Hits Workers
A further 410,000 workers will enter the higher 40% tax bracket at £50,270, while 70,000 earning £125,000 or more will pay the 45% additional rate. John O’Connell, chief executive of the TaxPayers' Alliance, said: “A million more are being caught in the taxman’s net by stealth. If he really wants to give hard-working taxpayers breathing space, he should end fiscal drag and unfreeze tax thresholds.”
Political Reactions
Shadow Chancellor Sir Mel Stride criticised the government: “Keir Starmer and Rachel Reeves hiked taxes to pay for more welfare. Andy Burnham has no plan for Government, so is rapidly heading towards the same. His announcements don’t add up.”
Treasury Denies Tax Increases
Treasury minister Emma Reynolds told the BBC on Thursday that none of the government’s recent interventions would require higher taxes. “All announcements we made this week are about reprioritising budgets, sometimes between departments, sometimes within departments, none of the announcements we have made this week will involve any tax increases,” she said. “We will look at further measures in the round in the run up to the budget because Andy Burnham really cares about these places.”
Conservative Leader's Expected Criticism
Conservative leader Kemi Badenoch is due to deliver a speech later, expected to say that Burnham is “still thinking like the mayor of Manchester”. She is anticipated to add: “Going by what he’s announced so far, Andy Burnham’s ambitions for Britain are too small.”
