BRITS will “inevitably” have to fork out more tax to pay for coronavirus, Tony Blair said today.
The ex-Labour PM said that the huge deficit being run up into the billions to fund businesses and help the NHs during the crisis would have consequences for everyone.
He told Sky News’ Sophy Ridge this morning: “There may be inevitably some increases in tax as a result of the big deficit we are going to run.”
The former PM, who ran Britain from 1997 to 2007, said that Labour should be “really careful” and “mindful” about backing tax rises.
Some on Sir Keir Starmer’s front bench have floated the idea of so-called ‘wealth taxes’ to pay back the money borrowed for coronavirus, but it’s not official Labour policy.
Mr Blair said any tax rises must be coupled with a mission to “drive better value through your public services and what the Government does”.
It wasn’t sensible to just spend more and money – including on the NHS – without looking at providing a good return for the public.
Boris Johnson promised in last year’s election that he wouldn’t raise VAT, income tax or national insurance – a promise he says still stands in light of the current crisis.
But Chancellor Rishi Sunak has stressed the books must be balanced again in the medium to long-term.
He has watered down the Tory election promise to just “an ambition” in a hint at what could be to come.
The financial thinktank the Institute for Fiscal Studies said after the Chancellor’s mini-budget that taxes WILL be on the cards – but likely not for the next year or two.
The ex-chief of HMRC has also said that tax rises will be inevitable.
In total, government borrowing reached £350billion this year — roughly ten per cent of GDP.
The report warned the Chancellor will now need to come up with £40billion worth of tax hikes or spending cuts just to stabilise debt levels to 100 per cent of GDP.
According to the Office of National Statistics, debt levels at the end of May exceeded 100 per cent of GDP for the first time since 1963.
The total level of debt has risen by £173bn over the last year to reach £1.95trillion – or 100.9% of GDP.