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 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: Its no secret that were looking at a challenging economic context.
Weve seen a global slowdown over the past year and of course well have to see the economic impact of the coronavirus.
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…”
