Sign up with your email address to be the first to know about new products, VIP offers, blog features & more.

Raising taxes could tip us back into recession

First published: 07/09/2020

A major debate has kicked off with important economic implications, and political consequences that go far beyond the daily cut and thrust of party politics. With public sector net borrowing expected to soar to over £350 billion in 2020/21, or 18 per cent of GDP, the government has either flagged its intention to raise taxation in a forthcoming public spending review and Budget this autumn, or floated a trial balloon to see what might or might not fly.

There are two essential issues here: the first is whether there’s an economic case for the government to raise taxes now on our still Covid-dominated economy, to put public finances onto a more sustainable footing, as Chancellor Rishi Sunak has said. The second is more political, namely if by doing so, the government would be compromising the functionality of our institutions and therefore our democracy. Read on….