The longest stealth tax rise in modern British history just got extended again. John Healey's first budget as chancellor left income tax thresholds frozen through 2030, continuing a policy initiated by Rishi Sunak in 2021, extended by the Conservatives to 2028, and stretched further by Rachel Reeves to 2030. Healey didn't even mention it. The budget documents simply confirmed the freeze remains in place. The mechanism is fiscal drag: when thresholds don't rise with inflation, ordinary pay rises push people into higher tax bands. The personal allowance stays at £12,570. The higher-rate threshold stays at £50,270. Inflation doesn't. The Office for Budget Responsibility calculates that had the personal allowance tracked CPI since 2021, it would be £4,900 higher by 2030-31, and the higher-rate threshold £20,100 higher. Those gaps are pure revenue extraction from earners who haven't gotten richer in real terms. The numbers are stark. The proportion of taxpayers paying higher or additional rate tax will have risen from 15% in 2021-22 to 24% in 2030-31 — nearly one in four earners. This isn't bracket creep at the margins. It's a structural shift in who bears the tax burden, achieved without a single parliamentary debate on rates. Three governments have now used the same trick. Sunak froze thresholds when inflation was expected to be moderate; it then surged. The Conservatives extended the freeze when the fiscal hole demanded it. Labour inherited it and kept it because it raises revenue without the political cost of announcing a rate change. The bipartisan consensus is revealing: this is the easiest money in fiscal policy, and no party has the incentive to give it back. The distributional impact is regressive in a specific way. Workers earning just above the personal allowance — around £12,570 to £15,000 — lose only modestly. The sharpest bite hits middle earners crossing the higher-rate threshold and those above £100,000 who lose their personal allowance at £1 per £2 earned, creating an effective 60% marginal rate band between £100,000 and £125,140. The freeze widens that trap every year inflation runs. What makes this particularly corrosive is the compounding. Each year of freeze doesn't just add a year of extra tax — it permanently shifts the baseline. Even if a future government unfreezes thresholds in 2030, the lost ground from 2022 to 2030 is never recovered. The IFS inflation forecasts underpinning the Guardian's calculator show the cumulative effect accelerating, not levelling off. The political economy is stable precisely because the mechanism is invisible. No chancellor announces "we are raising your taxes." Each simply declines to adjust a number. The absence of action is the action. For voters, the effect shows up as a smaller-than-expected pay rise — easy to blame on employers, hard to trace to Westminster. That invisibility is the feature, not the bug.
