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IFS Report Highlighting £52bn Stealth Tax Rise Shows Tories Have ‘crashed Our Economy’, Says Labour – UK Politics Live

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During his interview round this morning Andrew Mitchell, the development minister, welcomed the news that the US president Joe Biden is to fly to Israel after apparently getting the Israeli government to agree to corridors for humanitarian aid to enter Gaza, and to the designation of safe areas where civilians will not be bombed.

Speaking to Times Radio, Mitchell said this development was encouraging. And he said he hoped this would lead to the Rafah crossing, between Gaza and Egypt, being opened.

Mitchell said Israel had “both a moral and a practical responsibility” to allow humanitarian aid into Gaza.

And he stressed the difference between Israel and Hamas. “Israel uses its army to defend its citizens. Hamas uses its citizens to defend Hamas,” he said.

UK doing all it can to secure release of hostages held by Hamas, says ministerAs Harriet Sherwood and Ben Quinn report, two British teenage sisters are thought to be being held captive by Hamas after last weekend’s attack on communities in southern Israel. The girls were named as Noiya, 16, and Yahel, 13, by a spokesperson for British families whose relatives are suspected hostages.

Yesterday Rishi Sunak told MPs that six Britons are known to have died in the Hamas attack, and that another 10 were missing.

Andrew Mitchell, the development minister, told BBC Breakfast this morning that the government did not know where the teenage sisters were, but that it was doing all it could to get them back. He said:

We don’t know where they are and we are thinking of them all the time. And of course we are strongly supporting the attempt by Israel to find them and release them.

The British government will do everything we possibly can to get them back, as soon as we possibly can.

We mourn the six British hostages we know who have died and we are extremely concerned about the fate and the state of the other 10.

Andrew Mitchell (left) and Grant Shapps, the defence secretary, arriving for cabinet this morning. Photograph: James Veysey/ShutterstockHumza Yousaf to announce £300m more for NHS in Scotland – while telling SNP to focus on ‘why’ independence, not ‘how’Humza Yousaf is to pledge an extra £300m for the NHS in Scotland over the next three years, saying the cash could reduce waiting lists by 100,000 by 2026, PA Media reports. PA says:

The Scottish first minister and SNP leader will announce additional funding as he makes his keynote speech to his party’s annual conference this afternoon.

It is his first conference since taking over from Nicola Sturgeon as party leader and first minister in March this year – but it comes at a time when his party is seeing support slip in the polls, while a police investigation into internal SNP finances is still ongoing.

Yousaf will use his speech to the gathering in Aberdeen to insist that support for independence can be increased to a “sustained majority”.

After a debate about the party’s strategy for independence earlier in the conference, Yousaf will stress the SNP must now “concentrate not on the how – but on the why” of independence.

As part of that he will seek to put the issue of the economy at the heart of the campaign, claiming independence would help with “raising living standards” and building a “stronger economy”.

With the most recent figures showing there were 820,352 Scots on an NHS waiting list at the end of June, Yousaf – who was health secretary before becoming first minister – will use his speech to announce new cash to try to reduce the number who are waiting.

He will insist that post-Covid ministers are “working hard to reduce NHS waiting times” with a “significant reduction in the longest waits” having been seen since targets for this were announced last July.

But he will add: “I am announcing today that in each of the next three years we will invest an extra £100m to cut waiting lists. This additional funding will enable us to maximise capacity, build greater resilience in the system and deliver year-on-year reductions in the number of patients who have waited too long for treatment. That will reduce waiting lists by an estimated 100,000 patients by 2026.”

Humza Yousaf speaking to the media at the SNP conference yesterday. Photograph: Peter Summers/Getty ImagesJames Cleverly, the foreign secretary, arriving at No 10 for cabinet this morning. Photograph: James Veysey/ShutterstockIFS report highlighting £52bn stealth tax rise shows Tories have ‘crashed our economy’, says LabourGood morning. With Israel poised to invade Gaza, after Hamas committed the biggest slaughter of Jewish people in a single day since the Holocaust, and 2 million people in Gaza facing a humanitarian catastrophe, the news is rightly focused on the Middle East, and other political stories getting much less attention than they otherwise would. From the point of view of No 10, that is probably a blessing. The announcement yesterday about short jail sentences mostly being abandoned, and some prisoners being let out early, hardly got a mention on the news bulletins this morning, which for Downing Street must be a positive result. As the Daily Mail’s splash shows, the Ministry of Justice’s attempt to spin this as hardline “Texas” justice has, understandably, failed

There is another good example this morning. A report from the Institute for Fiscal Studies on the state of the public finances, ahead of the autumn statement, is getting some coverage, but not as much as it would if there wasn’t a war on. The Treasury will be pleased, because it’s findings are unremittingly grim. Here is the full report, and here is Richard Partington’s write-up.

The Conservatives have fought every election at least since the 1980s as the party of low taxation. But, as the IFS report suggests, that is no longer plausible. It says that Rishi Sunak’s decision to freeze the income tax personal allowance at its 2021-22 level for four years in his March 2021 budget, and Jeremy Hunt’s decision last year to make that a six-year freeze, not a four-year freeze, is now set to raise £52bn by 2027-28 – the same as a 6p rise in basic rate and higher rate income tax. The IFS says:

If we instead calculate revenue based on the latest inflation forecasts from the Bank of England (August 2023) and assuming that beyond 2026Q3 inflation remains at 2%, it looks like the freeze to both income tax and NICs thresholds is now on course to raise £52bn in 2027–28 (or £43bn if subtracting the cost of the increase in the point at which employees and the self-employed pay NICs)

This is a huge tax rise. To give a comparison, the biggest single tax-raising measure in recent history was the June 2010 budget decision to increase the main rate of VAT from 17½% to 20%, which is estimated to raise £21bn in 2027–28. Or, to put it another way, other ways to raise roughly £52 bn of revenue include increasing both the basic and higher rate of income tax by 6p, or increasing the main rate of VAT from 20% to 26%.

Despite this colossal rise in the tax take (a consequence of what is known as “fiscal drag”), the IFS also says the government cannot afford to cut taxes in the autumn statement.

Labour says this shows the Tories have crashed the economy. Darren Jones, the shadow chief secretary to the Treasury, said:

After 13 years of chaos and instability, the Conservatives have crashed our economy and left working people worse off.

Successive failures by Conservatives ministers have left us with low growth, high tax and national debt at the highest level in generations. Britain cannot afford another five more years of the Conservatives.

And Sarah Olney, the Lib Dem Treasury spokesperson, said:

This research lays bare the sheer scale of economic vandalism by the Conservative party.

Ministers have condemned the UK to sluggish growth, high inflation and soaring interest rates. It is hard-working families who are left to pick up the pieces, shouldering a huge burden of unfair tax rises and seeing our public services on their knees.

Here is the agenda for the day.

Morning: Rishi Sunak chairs cabinet.

11.30am: Downing Street holds a lobby briefing.

11.30am: Steve Barclay, the health secretary, takes questions in the Commons.

2pm: Prof Neil Ferguson, the epidemiologist whose modelling is credited with having had a decisive impact on Boris Johnson’s decision to order a lockdown in March 2020, gives evidence to the Covid inquiry.

3.15pm: Humza Yousaf, Scotland’s first minister, gives his keynote speech to the SNP conference in Aberdeen.

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