UK ON TRACK FOR BIGGEST TAX HIKE SINCE WWII, EXPERTS SAY

Sun 01 October 2023:

The current parliament will have presided over the biggest set of tax rises since at least the Second World War, experts have said.

The overall level of taxation in the United Kingdom is projected to rise more under the current parliament than under any other since records began in 1948, the UK’s Institute for Fiscal Studies said Friday.

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At the last general election in December 2019, tax revenues accounted for some 33% of national income. They are now on track to rise to 37% under Chancellor of the Exchequer Jeremy Hunt’s reign at the treasury, the London-based economics research institute estimated.

“The government may decide to announce tax cuts in the run-up to the next election. But there is no world in which this parliament – or indeed the period since Rishi Sunak became Prime Minister – turns out to be anything other than a tax-raising one. In fact, it is currently on track to be the biggest tax-increasing parliament since comparable records began,” the report said.

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This level of taxation has not been seen in the UK since the end of World War II. The UK government is expected to raise over £100 billion ($123 million) more in taxes next year, the equivalent of around £3,500 more per household.

The British government increased revenues from all sources during and in the immediate aftermath of the two world wars, according to figures that go back to 1900, and the COVID-19 pandemic led to a similar step-up, but the institute said the pandemic response could not explain all of the tax increases announced in recent years.

“It is far from the only – or even the most significant – explanation. Instead, tax rises have largely been the consequence of a desire for higher government spending on things that pre-date the pandemic,” the report read.

Hunt said last week that the government’s long-term debt was still too high to allow for tax cuts despite a multibillion-pound budget surplus.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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