Think tank says UK's middle earners face higher tax

Research body says voters face increased taxes regardless of who wins election

British Ukip  leader Nigel Farage    in Hartlepool on Tuesday. “The anti-English hostility and the kind of language that is used about and towards English people is totally extraordinary.” Photograph:  Nigel Roddis/EPA

British Ukip leader Nigel Farage in Hartlepool on Tuesday. “The anti-English hostility and the kind of language that is used about and towards English people is totally extraordinary.” Photograph: Nigel Roddis/EPA

 

Middle-income earners in the UK will face higher tax bills regardless of who wins the May 7th general election, the Institute of Fiscal Studies (IFS) has warned. The IFS accused political parties of producing “vague and opaque” tax and spend policies.

More than 1.5 million people earning £40,000 to £50,000 (€55,800 to €69,800) would pay the higher 40per cent tax rate by 2020 under Labour or Liberal Democrat plans. The Conservatives’ plans, meanwhile, would drag in 300,000 more workers.

Since 2010, the number of people paying the top rate of tax has grown from 3.2 million to 4.9 million, mainly because the higher-rate threshold was cut by the Conservative-Lib Dem coalition.

However, the respected institute reserved its most withering criticism for the parties’ tax and welfare plans: “All these parties seem to have a desire to raise tax revenue in a vaguely defined, opaque and apparently painless ways.

“In many cases,” the institute said, “proposals would lead to unnecessary increases in complexity and inefficiency in the tax system. Where benefit cuts are proposed, they are largely unspecified (Conservatives), vague (Liberal Democrats) or trivially small, relative to the rhetoric being used (Labour).”

The institute’s analysis came on a day when provisional economic figures suggest that the UK’s economic recovery is stuttering – although the Conservatives seized on the 0.3 per cent growth figures to warn voters not to take chances on May 7th.

Prime minister David Cameron, speaking to workers at a company in London, said: “All of this is at risk in nine days’ time.” Chancellor of the exchequer George Osborne said it was “a reminder” not to put the recovery “at risk”.

Meanwhile, Scottish first minister Nicola Sturgeon is to make a speech in Glasgow today, where she will insist “that Westminster must take heed of the democratically expressed voice of the people of Scotland” if the Scottish Nationalist Party holds the balance of power.

So far, Labour leader Ed Miliband – whose party is facing a near wipe-out of Scottish Labour-held seats, if opinion polls are even broadly accurate – has insisted that no deals will be done with the SNP. Opponents, however, say that line cannot be held after voting.

In East Lothian, an SNP candidate, George Kerevan, has been criticised for saying he “would relish the chance to take Scotland’s fight to the enemy camp”, although he later insisted that the “enemy” was austerity.

The leader of UK Independence Party, Nigel Farage, has accused the SNP of being “openly racist” towards the English. “The anti-English hostility and the kind of language that is used about and towards English people is totally extraordinary,” Mr Farage said. “If my supporters behaved in the way that some of those pro-independence supporters behaved in the referendum, I’d have been painted out to be the worst person that had been seen for 70 years in British politics.”