What would the perfect tax rise look like, from the Treasury’s point of view? Ideally, it would raise stupendous amounts of money, without anyone actually noticing that they’d become poorer. In the Chancellor’s wildest dreams, she might even be able to argue that it wasn’t a tax rise at all.
Well, luckily for the Treasury – but unluckily for the rest of us – such a tax rise exists. It’s called freezing the tax thresholds. Rishi Sunak started doing it in 2021. Rachel Reeves, on taking power, promised she’d stop doing it in 2028. But now that she’s desperate for cash, ministers are hinting very heavily that they’re going to start doing it again.
