OBR warns Healey: Stealth taxes to blame for living standards slump

Stealth taxes are one of three main reasons that British households are set to suffer near-stagnant disposable income growth in the current decade, the government’s budget watchdog has said. Office for Budget Responsibility chief Professor David Miles said that fiscal drag, whereby a freeze on income thresholds pulled more people into higher tax rates as wages grew, was squeezing people’s income. Miles told MPs on the Treasury Committee that so-called stealth taxes, which mean the Treasury is getting billions of pounds more than it would have done if thresholds moved up with inflation each, limited improvements in living standards. The OBR economist said stealth taxes were one of the three main factors slowing household disposable income growth, behind low GDP per capita figures since the Great Financial Crisis and a recent increase in energy prices. Money coming straight out of disposable income He said a lack of productivity growth had been “unusually low for an ex