Chancellor will need £40bn ‘to stop more public service cuts’

PHILIP Hammond will have to raise more than £ 0billion to hit his budget targets while protecting public services from further cuts, a think tank warned yesterday.

In a gloomy analysis, the Institute for Fiscal Studies said the tax burden was already on course to reach the highest level since the 1950s.

But it said this would not be enough to return the UK to the black by the middle of next decade. A further £ 1billion of tax hikes would be required, it said, including an extra £11billion to cover the rising cost of health care, social care and pensions.

IFS director Paul Johnson said ‘nothing of importance changed’ in the Chancellor’s Spring Statement, and that the outlook was ‘dismal’. With just over 30million taxpayers in the UK, a £ 1billion tax raid would cost an average of £1,350 each.

The warning comes a day after Mr Hammond said he was ‘positively Tigger-like’ over the outlook for the UK. The Treasury said its balanced approach ‘has reduced the deficit while also cutting taxes for over 30million people and investing in vital public services’.