MILLIONS of workers will be hit by a stealth tax on their earnings for years to come – as Rishi Sunak ripped up his entire manifesto ahead of the upcoming Budget.
Jeremy Hunt is poised to freeze income tax thresholds for six years as part of the plans to plug the huge hole in Britain’s finances.
Thousands more earners will be dragged into higher tax brackets, which won’t rise in line with inflation.
Middle earners on £50,000 could be around £3,500 poorer, according to research from Blick Rothenberg.
The plans could rake in an extra £5billion a year for the Chancellor.
Yesterday the PM’s press secretary admitted that all of Mr Sunak’s summer leadership vows are now up for review thanks to the dire state of the economy.
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They said: “We are looking at all the campaign pledges and we are looking at whether it is the right time to take them forward.
“We need to take some time to make sure what is deliverable and what is possible.
“Obviously those are pledges that were made a few months ago now.
“The context, particularly economically, has changed significantly since that time.”
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The PM yesterday dodged questions again on the triple lock promise – but insisted the upcoming Budget would be done with “fairness and compassion”.
He warned MPs in PMQs: “Everyone knows we do face a challenging economic outlook and difficult decisions will need to be made.”
And he insisted that cracking down now would put the public finances on a sustainable footing to help limit the expected hike in interest rates.
Mr Hunt and Mr Sunak met earlier this week to continue thrashing out the upcoming fiscal statement, with No10 saying “significant progress” had been made.
Yesterday Defence Secretary Ben Wallace gave the Chancellor some wiggle room on the promise to spend three per cent of GDP on defence by 2030.
He insisted he would be “fighting for as much money as I can” when he meets him today to thrash out MoD Budgets.
But he played down suggestions he could resign if he doesn’t get the cash he wants.
It came as polling guru Sir John Curtice yesterday warned it will be “extremely difficult” for Mr Sunak to win the next election.
He said despite the PM’s own personal popularity no government has ever survived a financial meltdown and the Tories were on course for a landslide defeat.
Sir John said Mr Sunak’s only hope of turning the tide was rescuing the economy – an area where he is more trusted than Sir Keir Starmer.
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Mr Sunak also needs to “play by the rules” unlike his predecessors.
Sir John said reappointing Suella Braverman was “a brave decision”.