According to the IFS it won’t work. This from the conclusion of their latest report:
‘Planned discretionary reforms to taxes are returning money to households, with the richest gaining the most. But at the same time, freezes to tax and benefit parameters are significantly and stealthily changing the scope and size of taxes and benefits over time. As prices increase, they drag more people into the tax system and into higher rates of tax, increasing the tax burden, while eroding the value of benefits and reducing the number of people eligible.
The magnitude of these subtle changes should not be understated, as they more than cancel out the impact of the two high-profile explicit policy reforms – the planned cuts to the rates of National Insurance and income tax. For every £1 households on average will gain from these planned tax cuts in 2025–26, they will lose £2 as a result of policy roll-outs and freezes to tax and benefit parameters. Overall, the progressive effect of freezes and policy roll-outs is more than outweighed by the impact of the discretionary tax changes, making the combined impact of changes to the system broadly regressive.’
