Ex-Treasury chief: Tax rises inevitable

TAX rises are ‘inevitable’ if ministers keep backtracking on austerity, a former Treasury mandarin warned yesterday.

Nick Macpherson, who was permanent secretary at the Treasury for more than a decade, suggested the Tories were in danger of pursuing a Labour agenda after failing to win a Commons majority at the general election.

Lord Macpherson, who stepped down last year, cited the recent climbdowns on scrapping the triple lock on pensions and meanstesting the winter fuel allowance as evidence that the Government is going soft on austerity.

He also highlighted the mixed signals from ministers on the public sector pay cap, and the decision to hand £1billion to Northern Ireland in return for the support of the DUP as evidence of weakness.

Lord Macpherson said the Tories were suffering ‘defeat in victory’, and suggested that higher taxes were now ‘inevitable’ in the Budget planned for this autumn.

In a withering assessment on Twitter, he added: ‘Triple lock. Winter fuel. Public sector pay. Northern Ireland bung. Tories implementing Labour and DUP policies. Defeat in victory.’

Ministers were accused of a ‘double U-turn’ on public sector pay on Wednesday after hinting that the 1 per cent cap on rises might be scrapped and then insisting that the position had not changed.

Downing Street intervened to ‘clarify’ the position after Chancellor Philip Hammond said he had not agreed to lift the cap, which is expected to save about £5billion a year in future. But ministers continued to hint that it could be lifted.

Yesterday Mr Hammond told MPs: ‘There is no change in the Government’s position. Our pay policy has always been designed to strike the right balance between being fair to our public servants and being fair to those who pay for them. That approach has not changed and we continually assess that balance.’