Taxes are at the highest level they have ever been in the UK ahead of Rachel Reeves’s spring statement, according to a leading economist. Paul Johnson, the director of the Institute for Fiscal Studies, said there has been an “historically extraordinary increase in taxes over the last five years”.
He added that the rise is “continuing over the rest of this decade”. It comes as the Chancellor, who hiked taxes by £40 billion in her autumn budget, is expecting to unveil spending cuts for some government departments in the Commons this Wednesday.
Mr Johnson told BBC Radio 4’s Today programme: “I think the key fact though is if you want serious money you have to do broadly speaking what the Chancellor did back in October – you have to raise one of the big taxes, and she decided to raise national insurance.
“Of course income taxes are rising because we are having allowances and thresholds frozen for a very long period of time.
“That is dragging more and more of our income into income tax, and that is why we have had this historically extraordinary increase in taxes over the last five years and that increase is continuing over the rest of this decade.
“So I think it is really important to be clear for those who are asking for increased taxes – this is the biggest period of raising taxes we have ever had, or at least we have had since the Second World War. They are rising by an extraordinary amount over this decade.”
The Chancellor is expected to slash spending in Whitehall departments as she tries to balance the books.
She has repeatedly said she will not budge from her fiscal rules, which rule out borrowing to fund day-to-day spending.
This has led to mounting pressure over how to balance the books – by raising taxes or cutting spending – amid disappointing growth figures and higher-than-expected borrowing.
But Ms Reeves told The Sun she would not be raising taxes in the spring statement.
