Summary
Sir Keir Starmer, the Labour leader, did not rule out continuing the freeze on tax thresholds, which determines the income level at which people start paying higher taxes. This freeze could continue until 2029/30, potentially raising £7 billion annually. Starmer stated he was committed to Labour's manifesto but did not provide clear answers on the future of tax thresholds.
Key Facts
- Tax thresholds have been frozen since 2021/22, meaning they have not been adjusted for inflation.
- This freeze means more people may pay higher taxes if their income increases.
- Extending the freeze until 2029/30 could bring in an estimated £7 billion each year.
- Labour's manifesto pledges not to increase National Insurance, income tax, or VAT but does not specify plans for tax thresholds.
- The government's fiscal rules aim not to borrow for daily spending and to reduce government debt relative to national income by 2029/29.
- A proposed wealth tax could involve a 2% tax on assets over £10 million, generating an estimated £24 billion per year.
- Critics argue that a wealth tax might prompt wealthy individuals to move abroad.
- Starmer emphasized not relying solely on taxes for economic growth.
