Mr. Paul Johnson:

The way in which tax thresholds are indexed in income tax has made a big difference to the structure of income tax. If you look back 30 years, we effectively had a single rate of income tax covering the large majority of people and a higher rate affecting only 5% or 6% of people. Given the way the thresholds have been indexed over that period, we have moved without anyone announcing it to a world in which something like one fifth of income taxpayers are paying that higher 40% rate. This is entirely down to the way in which the higher rate threshold has been changed and certainly has not risen anything like as quickly as earnings over that period. Although it has gone up and down at different points in time over that period, there was nothing like a consistent policy over that period, although it has been particularly noticeable over the past ten or 15 years post-2010.