Britain’s stifling tax burden

The Chancellor's Autumn Statement will see the tax burden rise in each of the next 5 years.

Jeremy Hunt
(Image credit: Getty Images)

The overall intention of Jeremy Hunt’s Autumn Statement, which provided a £20bn package of tax cuts including a 2% cut in national insurance (NI) and a full expensing scheme for business, was to “make work pay”, says Jeremy Warner in The Telegraph. “Unfortunately, there was one rather big fly in the ointment.” The tax burden won’t actually fall, but instead will rise in each of the next five years, eventually reaching a “new post-war high of 38%”, according to the Office for Budget Responsibility (OBR). “For any Tory chancellor, this is an extraordinarily uncomfortable position.”

The main reason for this is fiscal drag, says Michael Race on the BBC. NI and income-tax thresholds have been frozen since 2021 and Hunt left them untouched. Although high inflation has led many workers to secure pay rises, over the past three years some 2.2 million more people are paying basic-rate income tax of 20% while 1.6 million have been dragged into the 40% tax bracket. According to the Resolution Foundation, households will be on average £1,900 worse off over the course of the current parliament.

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Emily Hohler
Politics editor

Emily has worked as a journalist for more than thirty years and was formerly Assistant Editor of MoneyWeek, which she helped launch in 2000. Prior to this, she was Deputy Features Editor of The Times and a Commissioning Editor for The Independent on Sunday and The Daily Telegraph. She has written for most of the national newspapers including The Times, the Daily and Sunday Telegraph, The Evening Standard and The Daily Mail, She interviewed celebrities weekly for The Sunday Telegraph and wrote a regular column for The Evening Standard. As Political Editor of MoneyWeek, Emily has covered subjects from Brexit to the Gaza war.

Aside from her writing, Emily trained as Nutritional Therapist following her son's diagnosis with Type 1 diabetes in 2011 and now works as a practitioner for Nature Doc, offering one-to-one consultations and running workshops in Oxfordshire.