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Telegraph readers are calling on Chancellor Jeremy Hunt to unwind the “stealth” income tax grab and abolish inheritance tax in his Autumn Statement next week.
The freeze to income tax thresholds is dragging ever more middle earners into the 40pc higher rate of income tax. In 1991-92, just 3.5pc of UK adults paid the higher rate, according to the Institute for Fiscal Studies, but this figure is set to rise to 14pc by 2027-8 when the freeze is forecast to end.
Unfreezing the thresholds was the top priority for readers who resoundingly picked it as the measure they would most like to see announced by Mr Hunt on Wednesday.
More than 5,000 readers used the Telegraph’s online tool to reveal the most important fiscal policies to the nation ahead of what is likely to be one of the last chances the Chancellor gets to influence the outcome of the next general election.
Alongside the unfreezing of income tax thresholds, the complete abolition of inheritance tax – “Britain’s most hated levy” – and a cut to income tax for middle earners all ranked highly on readers’ wish-lists.
A commitment to maintaining the state pension triple lock is also a popular choice, coming ninth overall in our ranking.
Currently the state pension is set to rise by 8.5pc from April, fuelled by booming wage growth. Under the Government’s “triple lock” system, the state pension should rise in line with the highest of inflation, average wages or 2.5pc in April each year.
However, there have been rumblings that the policy is under threat amid accusations it is no longer viable in the current economic environment. And some readers agree with critics who think the lock should be unpicked. It is the tenth most popular policy choice overall.
Abolishing stamp duty land tax – the levy paid on property purchase – also comes high in readers’ priorities.
One of the few surviving measures from last year’s ill-fated “mini-Budget” is the doubling of the nil-band threshold of the levy from £125,000 to £250,000, but Telegraph readers want to do away with the levy altogether.
One policy the Chancellor is understood to be considering is handing a stamp duty rebate to homeowners who improve the energy efficiency of their properties in the first two years after buying. Supporters in the Government believe the proposal could help reduce household energy bills and mean less electricity is consumed across the UK.
Readers were also focused on the steps Mr Hunt could take to stimulate economic growth. GDP showed no growth in the three months from July to September this year, and the Bank of England is forecasting just 0.1pc economic growth next year.
Another key theme to emerge was an awareness that the Tories need to do more to win back wavering voters, as this may be the last fiscal statement before an election next year.
Cutting income tax for both high and low earners came within the top ten requests for the Chancellor, as well as a call for reforms to public sector pensions.
Mr Hunt has repeatedly warned that there will be no tax cuts in the Autumn Statement next week at the risk of fuelling inflation.
However, better than expected economic data and falling inflation has led to speculation that Mr Hunt could gamble on some crowd-pleasing announcements. The Resolution Foundation believes Hunt has around £13bn of headroom to play with, double what he had in the spring.
Any cuts would go down well with Tory backbenchers keen for Mr Hunt to reduce the tax burden, which is currently at its highest since the Second World War.
Major reforms to inheritance tax are being considered, The Telegraph understands. The Prime Minister and the Chancellor have discussed cutting the 40pc rate after Treasury officials concluded the move would not be inflationary as it would not put money directly into the economy.
The Telegraph has been urging the Government to abolish inheritance tax, which netted a record £7.1bn from bereaved families in 2022. Earlier this year, more than 50 Conservative MPs joined this newspaper in demanding that Mr Sunak scrap the “morally wrong” tax
Currently, heirs must pay inheritance tax on the part of someone’s estate worth more than the tax-free allowance of £325,000, which is currently frozen until 2028. The allowance rises to £500,000 for those giving a family home to their children, and to £1m for couples.
While slashing the 40pc rate would save families billions of pounds over the next few years, it would not reduce the number of families caught out by the tax.
The Treasury is also understood to be weighing up the creation of a “Great British Isa”, that would result in a boost for savers and the economy.
Mr Hunt is actively considering proposals to introduce an additional £5,000 allowance for savers who want to invest in UK-listed companies. Ministers are also considering plans that will allow savers to open multiple Isas of the same type in a single tax year without losing their £20,000 allowance.