The fiscal drag hits lower- and middle-income earners the hardest. We call on the Government to unfreeze income tax thresholds and index them to inflation. We believe this will make the tax system fair, let workers keep a fairer share of their earnings, boost the economy, and help families.

Since 2021, the personal allowance (£12,570) and higher-rate threshold (£50,270) have been frozen, creating a hidden tax rise- fiscal drag. Wages rise with inflation forcing millions of workers especially lower-paid and middle earners to pay more tax while their real income falls. Rising costs of living can weigh especially heavily on families raising children. We urge the Government to: 1. Unfreeze the personal allowance and higher-rate threshold 2. Commit to annual inflation-linked adjustments to thresholds.