loader image
Trending News
HomePoliticsHigher taxes WILL come to pay for coronavirus, IFS finance chief warns

Higher taxes WILL come to pay for coronavirus, IFS finance chief warns

Higher taxes WILL come to pay for coronavirus, IFS finance chief warns

HIGHER taxes will come from 2022 to pay for the coronavirus crisis, top finance chiefs warned today.

Paul Johnson, Director of the Institute for Fiscal Studies think tank, predicted that tax rises would come “eventually” to pay back all the billions the Chancellor has borrowed to help Britain through the pandemic.

⚠ Read our coronavirus live blog for the latest news & updates

Tax will have to rise in two years’ time, finance experts said today
Getty – Contributor
Reuters

Chancellor of the Exchequer Rishi Sunak visits the Worcester Bosch factory in Worcester[/caption]

At a post-budget briefing this morning he said that the focus for now would be on the economic recovery, rather than working out the finances.

But the chancellor admitted earlier that he did want to balance the books in the medium term.

Mr Johnson said earlier: “The time to pay for all this will come, but not this year and not next.

“The capacity will depend on how the economy recovers.

“Let’s hold in the back of our minds…

“A reckoning in the form of higher taxes will come, eventually.”

Boris Johnson earlier this week vowed to stick to his election promise not to raise VAT, income tax or National Insurance to pay for the coronavirus pandemic.

Mr Johnson told the Yorkshire Post during a visit to a construction site in Goole yesterday: “I don’t normally talk about fiscal stuff because I leave that to Rishi (Sunak) the Chancellor but what is in the manifesto is in the manifesto.

“We were elected, we got a big majority from the British people to deliver on that manifesto and we are very, very sincere in wanting to do that.”

He instead may have to look elsewhere for other taxes to hike up to get the public debt under control again.

The Government has shelled out £190billion in spending over the course of the crisis.

And including all the extra revenue in business rates holidays and other measures to help firms stay afloat, the total cost is in the region of £350billion.

Schemes such as the furlough scheme has been costing the Government as much as £14billion a month.

Tax rises could be equivalent to 1.5 per cent of GDP – £35bn a year in extra revenue – the IFS predicted earlier.

Carl Emmerson said the figure is contingent on recovery but “it could be quite a chunky tax rise”.

If the economy bounces back quicker than predicted, more tax revenues would likely help to plug the gap.

But if more people lose their jobs and a recession drags on, this would be much harder.

At the moment the cost of borrowing is very low as interest rates are at record levels.

In future as they rise, the cost of servicing Britain’s huge debts may become less manageable.

Yesterday the Chancellor outlined his mini budget to help Britain get back on course after the coronavirus crisis.

He announced:

Simon Walker HM Treasury

Yesterday the Chancellor revealed a huge £30billion package of new measures to boost the economy[/caption]

Reuters

The Chancellor wants to balance the books in the longer term[/caption]

Boris Johnson is expected to keep his promises over taxes – but they could have rise in the longer term
Alamy Live News

Most read in Politics

WHAT A WASTE


Couple forced to give back garden after spending £22,000 renovating wasteland

DEPP’S DEN


Shock new pics show Depp passed out and his breakfast of cocaine & whisky

NAYA MYSTERY


Glee star’s son, 4, told cops she ‘jumped into lake and didn’t come back up’

‘IRRESPONSIBLE’


Hospital boss accuses OWN staff of sparking virus outbreak by ‘lack of PPE’

DEATH TRAPS


Bars & gigs put you at ‘highest risk’ of Covid – so where is most safe?

BACK IN SHAPE


Government set to reopen gyms within DAYS if coronavirus rules are followed


Many of the areas the PM has promised to level up by boosting spending will struggle to keep up with the rest of the country in the economic recovery from coronavirus.

London has been hit hardest by job losses – but will be able to make up lost ground as the country reopens.

CORONAVIRUS CRISIS – STAY IN THE KNOW

Don’t miss the latest news and figures – and essential advice for you and your family.

To receive The Sun’s Coronavirus newsletter in your inbox every tea time, sign up here.

To follow us on Facebook, simply ‘Like’ our Coronavirus page.

Get Britain’s best-selling newspaper delivered to your smartphone or tablet each day – find out more.

,

Share: