Chancellor Rachel Reeves is set to make her spring statement next week amid growing pressure over tax threshold freezes, with a campaign piling pressure on her to revisit the personal tax allowance for Britain's lowest-paid workers. The basic income tax threshold has remained frozen at £12,570 since 2021. Concerns are mounting that millions of additional people, including many of the country's poorest earners, have been dragged into the tax net through 'fiscal drag'. Inflation, which directly affects wages, has been rising sharply, meaning some of Britain's most financially vulnerable workers face being taxed the moment their earnings exceed £12,570. Because the threshold has remained unchanged, inflation and wage growth mean that considerably more people are now liable for tax than would otherwise have been the case had it risen in line with historical precedent.
A petition on the Parliament website calling on the Government to raise this threshold has gathered 89,475 signatures, nearing a significant landmark. The petition obliges the Treasury to formally issue a response, and should it reach 100,000 signatures, a Parliamentary debate could be triggered. Campaigners must move swiftly to meet the target, with merely 3 days remaining until the deadline of February 28. The petition was launched by Shannon Keene.
This could intensify pressure on Chancellor Rachel Reeves to implement changes in the November Budget. The issue has generated several petitions, illustrating the intensity of public feeling across the country. Earlier in the year, one appeal calling for the threshold to rise to £20,000 amassed a remarkable 281,792 signatures on the Parliament platform before being closed to further support during the summer months. This earlier petition prompted a Westminster debate, where the Treasury estimated the financial impact of raising the threshold to £20,000 at £50 billion. A new petition has subsequently emerged pressing for the income tax personal allowance to increase from £12,570 to £20,000. The earlier petition's position amongst the most signed in the parliamentary website's history was interpreted by activists as compelling evidence of widespread public sentiment regarding this issue.