Overview

• The think tank proposes cutting employee national insurance by 2p and raising income tax rates by 2p, a switch it says would raise about £6bn a year by bringing pensioners, landlords and the self‑employed further into the tax base.
• It says the swap would protect workers’ pay packets and should sit within a wider package to raise roughly £20bn by 2029–30, alongside options such as higher dividend taxes, a broader sugar and salt levy, a carbon charge on long‑haul travel and lowering the VAT threshold from £90,000 to £30,000.
• House of Commons Library research commissioned by the Liberal Democrats finds extending frozen income‑tax thresholds to 2030 would raise more than £10bn, leave the average taxpayer £285 worse off by decade’s end and pull more than 1.3 million people into higher bands.
• Opposition figures, including Lib Dem leader Sir Ed Davey, label any extension of the freeze a stealth tax and urge the chancellor to rule it out ahead of the autumn statement.
• The Treasury says strengthening the public finances relies on economic growth, reiterates a commitment to keep taxes on working people as low as possible and declines to comment on potential budget measures.