Budget 2020: Chancellor must RAISE taxes in first Budget or break Government rules, think tank warns
THE Chancellor must raise taxes in his first Budget or risk breaking Government rules, a think tank has warned.
Rishi Sunak replaced Sajid Javid on a brutal day in Westminster earlier this month and has inherited a target of balancing the books by 2022.
Now the Institute for Fiscal Studies have said this will not be possible unless he whacks up taxes.
Paul Johnson, Director at the IFS, said: “The Chancellor is hemmed in by a rising deficit and fiscal targets set out in the Conservative manifesto.
“We have already had 16 fiscal targets in a decade, and fiscal targets should not just be for Christmas.
“Mr Sunak should resist the temptation to announce another and instead recognise that more spending must require more tax.
“There are plenty of tax rises which would both raise revenue from better off individuals and improve the coherence of the tax system.”
The IFS warned if the Government did not abandon the fiscal target, Brits would face either tax rises or seeing massive spending cuts.
It comes as it was revealed Mr Sunak will be forced to delay some of his biggest decisions on tax, borrowing and spending due to the coronavirus.
The crisis has hit forecasts, with treasury officials now admitting things are “challenging”.
One said: “It’s no secret that we’re looking at a challenging economic context.
“We’ve seen a global slowdown over the past year and of course we’ll have to see the economic impact of the coronavirus.”
MOST READ IN
The Chancellor is tipped to cut subsidies for a type of diesel used by off-road vehicles, and cooling on ending the ten-year freeze on fuel duty after a backlash from Tory MPs.
Asked about fuel duty this morning, policing minister Kit Malthouse: "Well you'll find out in the Budget whether we do or we don't..."
The Tory manifesto pledged to raise the threshold for national insurance contributions to £9,500, as well as a "triple tax lock" to ensure rates of income tax, national insurance and VAT do not rise.
We pay for your stories! Do you have a story for The Sun Online news team? Email us at [email protected] or call 0207 782 4368 . You can WhatsApp us on 07810 791 502. We pay for videos too. Click here to upload yours.