A new survey finds 8 in 10 UK adults back tax increases to help improve the UK’s public finances in this week’s Autumn Statement.
The figures, gathered by Opinium on behalf of investment business AJ Bell*, show that just one in ten people are opposed to any tax rises at all. The overwhelming majority (81%) say they support at least some tax increases, to help plug the deficit in the UK’s finances.
Hiking wealth taxes, increasing taxes on business and raising alcohol and tobacco duty were among the most popular options from voters. But a windfall tax on energy company profits was backed by 56%, making it the tax rise with the most public support.
In contrast, taxes on income and spending garnered the least support. Increasing VAT was supported by just 6% of respondents, making it the least popular tax hike, while raising National Insurance (11%) and income tax (14%) were also backed by fewer people.
It illustrates the challenge facing the Chancellor, Jeremy Hunt, as he prepares to deliver his Autumn Statement this week. He is expected to announce a package of both tax increases and spending cuts designed to balance public finances.
Although the polling, conducted between 8-11 November with 4,000 UK adults, shows broad support for raising taxes, the Chancellor risks a backlash if he tampers with VAT, National Insurance or Income Tax, which the Conservatives pledged to leave untouched in their 2019 manifesto.
Laura Suter, head of personal finance at AJ Bell, comments: “There’s no doubt that the new Chancellor is between a rock and a hard place this week in his bid to balance the books but not alienate the UK public so much that there’s a backlash at the next general election. Only seven weeks ago the British public were being promised a huge round of tax cuts, from National Insurance to income tax to dividend tax. But now Jeremy Hunt must convince them that tax rises are the order of the day.
“While the overwhelming majority of people acknowledge that taxes must rise, to help plug the gap in the UK’s finances, it’s understandable that most people support taxes that they won’t directly pay. The huge support for an energy windfall tax may spur the Government on to ramp up Rishi Sunak’s ‘energy profits levy’ and hit energy firms with a bigger tax bill.
“All eyes are on whether the Government breaks its 2019 manifesto pledge to not raise taxes. What looks more likely is that they will use the more slippery method of freezing thresholds for longer, leading to a stealth tax rise for the nation, but staying within the rules of their manifesto pledge – if not the sprit.
“Another option being proposed is cutting the threshold for the additional rate of tax, down from £150,000 to £125,000 – which would drag more people into the 45% income tax threshold but falls just short of explicitly raising tax rates.”