Higher taxes ‘may be permanent’

UK households facing £3,500-a-year tax hike, says think tank

Rishi Sunak
Rishi Sunak's government is on course to raise more than £100 billion in tax revenue next year, according to IFS analysis
(Image credit: Hollie Adams - WPA Pool/Getty Images)

The Conservatives have overseen the largest tax rises since the Second World War, a new analysis has found. 

The Institute for Fiscal Studies (IFS) forecasts that, by the next general election, taxes will amount to around 37% of the national income: the highest level since records began in 1948. The hike puts Rishi Sunak's government on track to raise £100bn more annually by 2024 than if taxes, as a share of national income, had remained at the 2019 level of 33%, according to the think tank.

That equates to an average of around £3,500 more per household.

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Successive Conservative governments have "announced a series of tax-raising measures" in recent years, said the BBC, including an increase in corporation tax from 19% to 25%, a levy on profits made by energy companies, and freezes to some income tax and National Insurance thresholds. 

And going into the next election, that burden is likely to increase, IFS director Paul Johnson told Radio 4's "Today" programme. Spending on pensions and health and an ageing demographic meant the country was facing "almost certainly a permanent increase in taxes", he said.

Treasury Minister Andrew Griffith refused to commit to reducing the tax burden or tax cuts before the next general election, telling Sky News that the government's priority was "bringing down inflation".

The IFS analysis was published on the eve of the Conservative Party Conference, which begins on Sunday in Manchester, and is likely to stoke "fresh infighting" among Tory MPs, said The Guardian

Former prime minister Liz Truss told The Telegraph that the "unprecedentedly high tax burden" was a key reason why Britain's economy is "stagnating". Labour also seized on rising tax levels as evidence of the Tories’ failure to grow the economy, arguing that sluggish economic growth has left the government with less money to spend on funding public services.

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