Income tax rate 'could be nine per cent'

Sunday 18th September 2005 at 23:00

The basic rate of income tax could be reduced to nine per cent if public spending had increased in line with rate of economic growth, according to a report published on Monday.

In its study Reform maintains that if public spending had increased in line with the rate of growth of the economy, rather than outstripping it, the starting and basic rates of income tax could be reduced to nine per cent by 2007/08.

The think tank claims that such a move would leave married couples on average earnings nearly £2,000 better off.

But instead of tax cuts to come, one academic predicts more tax rises in the future.

Writing for the think tank, Nick Bosanquet, professor of health policy at Imperial College London, says: "For the last 10 years most residents have thought of the UK as a low tax country.

"That view is about to change because direct tax rates will have to rise and middle England will bear the brunt."