Around 1.6million low-paid workers set to bear brunt of Tory stealth taxes

02 January 2024 , 22:30

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Income tax thresholds were frozen by Rishi Sunak in 2022 until 2028 (Image: Getty Images)

Around 1.6million low income workers are set to bear the brunt of Tory stealth taxes, a new analysis warns.

Labour says people already struggling with the cost of living and working in hospitality, retail, and cleaning and maintenance sectors, will make up almost half of those impacted. According to the party, by 2024-2025 a family with two adults working full time on the National Living Wage will pay £1,320 more a year.

This is down to stealth taxes buried in the Chancellor Jeremy Hunt ’s Autumn Statement, including income tax and national insurance threshold freezes and council tax hikes.

In a massive hit to households income tax thresholds, which usually increase in line with inflation, were frozen by Rishi Sunak as Chancellor in 2022 until 2028. Last year the Institute for Fiscal Studies (IFS) think-tank warned the tax burden was on course to hit the highest level since the Second World War.

Labour's findings come as the PM faces huge pressure from Tory MPs to slash taxes in a pre-election giveaway at the Budget on 6 March. The party has also launched an online 'Tory tax calculator' for the public to check how worse off they are after 25 tax rises since the 2019 general election.

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It allows voters to work out if their taxes are likely to rise even after the Government's 2p to the rate of national insurance comes into effect on Friday.

Labour’s Shadow Chief Secretary to the Treasury Darren Jones said: “The Chancellor sold his Autumn Statement as a reward, but hidden in the fine print, working families are being struck with an even higher tax burden they were already paying.

"Taxes are higher than at any time since the war yet our public services are on their knees and the economy isn’t growing. With Keir Starmer, the Labour Party has changed, and is now the only party of fiscal and economic responsibility.” Labour has a real plan to get our economy growing again, to fix our public services and to create good jobs right across the country for working people. The Treasury has been contacted for comment.

Ashley Cowburn