Stealth tax could put 30 million workers out of pocket

Thursday 25th March 2010

George Osborne, the shadow chancellor, has accused Alistair Darling of failing to mention a major “stealth tax” which will see millions out of pocket and could see some requiring debt management advice.

Last year the chancellor announced a freeze on personal allowances as the country experienced negative inflation.

However, now that inflation is once again on the rise, many could be significantly worse off every year.

In an interview with Sky News, Osborne lambasted the chancellor’s neglect of the issue.

“One of the largest tax measures in the Budget was not even mentioned in Alistair Darling’s speech,” he said.

“That is an effective tax rise on 30 million working people, because when he said he was going to freeze [personal allowance] last autumn, inflation was negative. Now inflation is 3.7 per cent on the RPI.”

In real terms, the Conservative politician contends, workers in the base tax band will lose out on roughly £50 a year.

Leader of the liberal Democrats, Nick Clegg, was equally underwhelmed by the government’s economic outline.

“This Budget was a political dodge not an economic plan,” he said.

“Britain needed a Budget that gave us honesty in spending and fairness in tax, we have got neither.”

Further strain could be put on the indebted by the announcement, in the Budget, that duty on a number of products is set to rise considerably.

Tobacco, alcohol and fuel will all see significant price rises in the coming months and years.

Cider drinkers have been particularly hard hit as duty is set to increase by ten per cent more than inflation.

With high energy and fuel bills, this tax and the rises revealed in yesterday’s Budget could lead many already struggling to make ends meet forced to seek out debt management advice.

News article brought to you by Debt1 – UK debt management specialists

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