THEY’RE COMING AFTER YOUR MONEY…
Treasury warns of savage tax hikes
THE Treasury has warned of “inevitable” tax rises as the new PM seeks to fill a “black hole” in public finances.
Rishi Sunak and Chancellor Jeremy Hunt met on Monday to discuss options for the financial statement on November 17.
They agreed “tough decisions” were needed on tax rises, as well as on spending.
The Treasury gave no details but said “everybody would need to contribute more in tax in the years ahead”.
A Treasury source did not put a figure on what they called “the fiscal black hole”, but it may be at least £50billion.
The source said: “It is going to be rough. The truth is that everybody will need to contribute more in tax if we are to maintain public services.”
The source said, given the scale of borrowing for energy bills support and the COVID-19 pandemic, “we won’t be able to fill the fiscal black hole through spending cuts alone”.
The Treasury said: “Given the eyewatering size of the fiscal black hole, the PM and the Chancellor agreed that tough decisions are needed on tax rises, as well as on spending.”
Few concrete details of the Government’s plans have emerged, but a Treasury source told the Daily Telegraph that Mr Hunt is planning to fill the budgetary shortfall through a combination of 50% tax rises and 50% cuts to public spending.
While the Treasury said Mr Hunt and Mr Sunak “agreed on the principle that those with the broadest shoulders should be asked to bear the greatest burden”, it warned that “given the enormity of the challenge, it is inevitable that everybody would need to contribute more in tax in the years ahead”.
Last week Mr Sunak warned the public a “profound economic challenge” lay ahead.