Theresa May’s government should scrap plans to raise the point at which workers start to pay income tax by £1,500, according to a highly respected think tank.
The Resolution Foundation says that increasing the limit from £11,000 to £12,500 would disproportionately help the better off.
A new study published by the foundation today also warns that tax giveaways worth £32 billion this year alone have prolonged austerity for millions.
Without them ministers would have already have met their targets to close the Budget deficit, the group calculate.
Matt Whittaker, chief economist at the Resolution Foundation, said: “Tax cuts on this scale have clearly played a role in supporting household incomes, though around four-fifths of the £21bn due to be spent on raising the personal tax allowance by 2020 will have actually gone to the richest half of households.
“With the Chancellor indicating that he will press the ‘fiscal reset’ button in his Autumn Statement, now is the time to rethink the government’s tax policy."
The foundation also warns that the rise could take more people out of paying income tax altogether.
Such a narrowing of the tax base can make the government coffers less resilient to future economic shocks it warns.
Mrs May's government is also under pressure over planned cuts to disability benefit.
A number of Conservative MPs are preparing to join the SNP in calling for a delay to the reforms.
It follows concerns about the reforms to Employment and Support Allowance, which will reduce payments for sick and disabled people by £29 a week.
Tory backbencher David Burrowes said "tens" of Conservative MPs were unhappy with the plans.
The SNP's Neil Gray has called for a debate on the issue before the Autumn Statement.
Meanwhile, updated figures on the impact of welfare reforms on Scotland published by today the Scottish Parliament show the poorest areas in the west of the country will suffer the biggest cuts.
The average annual loss per working age adult in Glasgow, West Dunbartonshire, North Ayrshire and Inverclyde will be £400, £390, £380 and £370 respectively by 2020-21.
The losses will be smallest in affluent areas such as Aberdeenshire, East Dunbartonshire, East Renfrewshire and Edinburgh, at between £170 and £230 per adult.
In a report to Holyrood’s social security committee, researchers from Sheffield Hallam University estimate Scotland will receive £2bn less in total per year because of welfare cuts.
The first wave of reforms introduced by the 2010-15 Tory-Lib Dem Coalition accounts for £1.1bn, while more recent cuts under the Tory majority government account for £1bn more.
However the projected loss was slightly down on previous estimates issued in March.
Some of the benefit reductions will also be partly offset by higher income tax thresholds, a higher national living wage, and improved childcare support, although the researchers said the winners and losers were “unlikely to be the same people”.
They concluded: “Welfare claimants have lost large sums already, and are set to lose further large sums. The devolution of welfare powers will not in itself alter this stark reality.”
SNP committee convener Sandra White said: “Whilst Scotland will take control of 15 per cent of welfare spend it is clear that the majority of people in Scotland will continue to be negatively impacted upon due to the UK Government’s approach to welfare.”
Research co-author Professor Steve Fothergill said it was “questionable” whether the reforms would achieve the government’s aim of get more people off benefits and into work.
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