John Healey new £12,570 tax threshold change update as 24-hour deadline hits

Résumé détaillé

Chancellor told by MPs freeze is 'biggest impact' on living standards as support soars for campaign to raise limit ...

Chancellor John Healey has given an update on frozen tax thresholds as support soars for calls to raise the lowest limit from £12,570 to £20,000. In his Budget Mr Healey failed to change the situation in spite of growing opposition.

A petition on the Parliament website is calling for the lowest tax threshold - presently £12,570 - to be increased to £20,000. Support has soared in the last week to more than 41,000 signatures - it will prompt an official Treasury response - and if gets to 100,000 will be considered for a Parliamentary debate - but there is just 24 hours left.

At the Treasury Committee this week an MP confronted the Chancellor saying the Office for Budget Responsibility had said the freeze was the ‘biggest impact’ on disposable income. Liberal Democrat MP Bobby Dean said: “The OBR noted that the freeze on tax thresholds is having the biggest impact on people’s disposable income and therefore on their living standards. You said that you did not want to raise taxes, but over the course of this Parliament that threshold freeze is the equivalent of putting about 2% onto income tax.

“If you were to take the decision to raise income tax by 2%, you would be expected to explain that at the Dispatch Box, but freezing the thresholds was not mentioned at all in your Budget speech. Do you think it is fair on the public for them to see an effective tax rise without it being explained or justified?”

Mr Healey replied: “The decision on thresholds had already been taken; it was not a fresh decision for me for this Budget. I wanted to reject any arguments for an across-the-board increase in taxes, which I did. “The second thing I wanted to do was to make sure that, as a governing party, we could respect and follow the commitments that people voted for us on at the election: that we would not raise the levels of income tax, national insurance or VAT.”

The petition, launched by Wade Reid, declares: “The personal allowance has been frozen while living costs have risen, meaning…

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