UK To Face Years Of High Taxes, Think Tank Warns
New analysis of the chancellor’s Autumn Budget suggests that the government is setting the stage for the “end of low tax conservatism.”
Analysis by think tank Resolution Foundation suggests the plan comes in contrast to the prime minister's pledge of a high wage economy. It also contradicts low tax plans favoured by several Tory MPs, the think tank says.
The foundations for the Autumn Budget were laid by a better-than-anticipated outlook for public finances, handed down by the Office for Budget Responsibility, as the UK saw £141 billion lower borrowing windfall. However, family finances across the country are deteriorating, with household incomes set to stagnate due to rising inflation.
According to the Resolution Foundation, half of this windfall has been used to increase public spending while the other half is used to meet the chancellor’s new fiscal rules. The think tank warns that, with higher growth, inflation and public spending than previously predicted, along with tax rises, the UK could be set for a flat recovery for household living standards.
By 2026-27, tax as a share of the economy is expected to be at its highest level in seventy years, amounting to a £3,000 increase per household since Boris Johnson became prime minister.