Boris Johnson clashes with Tom Newton Dunn on cost of living
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The new paper, produced by the House of Commons library, claimed a couple that earns median salaries of around £72,000 combined annually would pay about £5,500 more as a result of the National Insurance tax hike and the freezing of the income tax threshold.
The Commons library research found that a household with median earners, with a combined salary of £717,640, would pay an extra £5,550 in tax directly arising from policies introduced by the Tories since 2021.
The bleak calculations, however, assume the Chancellor will go ahead with his promise to cut the basic rate of income tax from 20p to 19p in 2024.
Earlier in the year, the opposing MPs urged Mr Sunak to consider a ‘compromise plan’, which would still see the National Insurance rise as planned but the rise affecting workers would be paused.
According to the Institute for Fiscal Studies, the move would have raised £5billion of the £12billion pencilled in by the Treasury, while easing the pressure on millions of workers on low and middle incomes.
A couple earning a median salary combined will pay an extra £5,550 in tax (Image: Getty)
The calculations are based on a combined salary of about £72,000 (Image: Getty)
However, the Chancellor and Mr Johnson have rejected the calls, insisting that they need to fund the NHS.
Downing Street is now said to be currently focusing on “non-fiscal” measures that could potentially reduce the cost of living, in an implied acknowledgement that its Spring Statement failed to address the enormity of the problem.
Mr Johnson has said the government would renew efforts to encourage members of the public eligible to utilise schemes with low take-up, including tax-free childcare of about £2,000 a year that about 1.3million households are yet to claim.
Some 850,000 eligible households are also not claiming pension credit, which can be worth over £3,300 a year.
Ed Davey said there’s no light at the end of the tunnel under Tory rule (Image: Getty)
But the Labour Party has hit back and said the Government need to go further and set out an emergency budget to tackle the crisis.
Shadow Transport Secretary Louise Haigh, said: “This is a savage extra cost for working people.
“The Conservative Government needs to set out an emergency budget to tackle its cost of living crisis – and support Labour’s call to put money back in the pockets of working people.”
Ed Davey, the Lib Dem leader, said the newly released figures showed that “there is no light at the end of the tunnel under this Conservative government, just years of painful tax rises”.
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Labour said the Government should announce an emergency budget to tackle the crisis (Image: Getty)
He added: “Now is not the time to be hiking people’s taxes, just as energy bills and inflation go through the roof. People are facing a cost-of-living emergency, and they need an emergency tax cut now.”
A spokesperson from the Government said: “We understand that people are struggling with rising prices, and while we can’t shield everyone from the global challenges we face, we’re supporting British families to navigate the months ahead with a £22 billion package of support this financial year.
“That includes cutting taxes for working people by raising the National Insurance Contribution threshold, saving the typical employee over £330 a year; lowering the Universal Credit taper rate to help people keep more of the money they earn; and providing millions of households with up to £350 each to help with rising energy bills.”