Hammond hints taxes will rise to ease austerity

Chancellor says Tories are ‘not deaf ’ to election result and tax and spending plans need to be ‘looked at’

Laura Hughes Christopher Hope

PHILIP HAMMOND has hinted the Government could raise taxes over the course of the next Parliament in a bid to ease years of austerity.

The Chancellor said the Conservatives had never pledged not to raise “some taxes” and suggested that £3 billion of cuts to council spending budgets might not ahead.

Mr Hammond also gave vent to his frustration that he was not allowed to defend the Conservatives’ record on the economy since 2010 during the campaign.

He told BBC1’S Andrew Marr Show: “I would have liked to have made much more of our economic record which I think is an excellent one, creating 2.9 million new jobs, getting the deficit down by three quarters.”

Asked if he was kept off the airwaves during the campaign, he said: “I’m not going to speculate about what happened inside the campaign leadership team. The end result is that, in my judgment, we didn’t talk about the economy as much as we should have done.”

The admission that taxes might rise was attacked by Right-wing think tanks as short-sighted and extremely misguided. Mr Hammond said the public is “weary of the long slog” it has endured since the financial crash.

He said the Government would “look at” plans it had for cuts to winter fuel allowances and ending the triple lock on pensions.

Theresa May’s failure explicitly to rule out tax increases during the election campaign worried Thatcherite groups.

Mrs May said voters faced a choice between “lower taxes under the Conservatives or higher taxes under Labour” and repeatedly failed to commit to tax cuts for higher earners if the Conservatives won the election.

Independent forecasts show that by the end of the decade the tax burden – the amount of the nation’s income drawn from tax receipts – will reach its highest level for 30 years. It currently stands at 34 per cent of gross domestic product.

On the Andrew Marr Show Mr Hammond left the door open to raising taxes, as he insisted borrowing more is “not the solution”.

Asked if he would go ahead with £3billion of cuts to councils, he said: “We’ve set out a series of measures that are already legislated for.

“We have other proposals that we will now have to look at again in the light of the general election result and in the new Parliament.

“I will be delivering a budget in the autumn and you will find out then what we are proposing.”

Pressed yesterday on whether the Government would have to change direction, particularly if it does a deal with the DUP, which is opposed to cuts to the winter fuel allowance and the end of the triple lock on pensions, Mr Hammond said: “We will look at all these things. Obviously, we are not deaf. We heard a message last week in the general election and we need to look at how we deal with the challenges we face in the economy.

“I understand that people are weary after years of hard work to rebuild the economy after the great crash of 200809, but we have to live within our means. More borrowing, which seems to be Jeremy Corbyn’s answer, is not the solution.

“We have never said we won’t raise some taxes. Overall, we are a government that believes in low taxes and we want to reduce the burden of taxes overall for working families.”

The Tory manifesto scrapped the “triple lock”, which guaranteed there would be no rise in national insurance, VAT or income tax, in favour of a general statement of intent to lower tax and simplify the tax system.

Mr Hammond, who kept a low profile during the election, reiterated on ITV’S Peston on Sunday yesterday that the party should have campaigned on its economic record.

He said: “I think it was a mistake of the campaign not to focus more on an area where we have a great story to tell; our record on the economy since the great recession.”

But he insisted he had been “not