In recent days, the Institute of Fiscal Studies (IFS) has forecast that colossal tax rises will be required between now and 2025 in order to cut the UK’s deficit in line with Government pledges.
Following the Spring Statement announcements earlier this week, the IFS has argued that the Chancellor, Philip Hammond, painted a somewhat inaccurate picture of the future of the UK economy on Tuesday.
During the announcements, Mr Hammond told the nation that growth was forecast to be 1.5 per cent in 2018 and that debt would fall as a share of GDP by 2018/19.
He added that inflation would return to just two per cent by the end of this year.
However, in the wake of the announcements, Paul Johnson, Director of the IFS, has warned that in his view, the UK’s economic growth outlook is “the worst in the G20.”
On top of this, he added that annual tax rises of up to £40 billion will be required over the coming years just in order for the Government to ‘balance its books’ by the year 2025.
Mr Johnson said that the Government was noticeably struggling to collect as much tax as it used to – and that the Chancellor faced a considerable challenge in balancing growing demands for spending increases with his pledge to eliminate Britain’s deficit by the mid-2020s.
He said that “the reality of the economic and fiscal challenges” facing the country ought to be “at the very top of the news agenda” but that “nothing much” had been said during the Chancellor’s Spring Statement announcements to reflect the importance of the issue.