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Prime Minister and Chancellor set to hike taxes

Chancellor Jeremy Hunt is set to announce tax rises in his fiscal statement later this month, with the Treasury saying Mr Hunt and Prime Minister Rishi Sunak have agreed “tough decisions are needed on tax rises as well as spending.” A Treasury source said the PM and Chancellor agreed “on the principle that those with the broadest shoulders should be asked to bear the greatest burden,” while warning that it is “inevitable that everybody would need to contribute more in tax in the years ahead”. The source said that on the back of pandemic-related support measures and assistance on energy bills, the Government “won’t be able to fill the fiscal black hole through spending cuts alone.” While VAT, National Insurance and income tax hikes are understood to be off the table given previous pledges and Conservative Party manifesto commitments, the Treasury is likely to focus on stealth measures such as freezing income tax thresholds for another two years. Mr Hunt is reportedly looking to implement an equal split of 50% tax rises and 50% spending cuts, which could translate into £25bn in hikes for taxpayers. John O’Connell, chief executive of the TaxPayers’ Alliance, said: “Taxpayers will be horrified by talk of bigger bills to come.” He added: “With the tax burden at a 70 year high, Brits are being expected to bear the brunt of a spiralling cost of government crisis,” going on to insist that the Chancellor “must make significant savings to ease the strain on hard-pressed households.”

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Financial Times