7p on income tax to balance the books
By politics.co.uk staff
Brits will need to face up to a 7p rise in income tax and VAT on previously untaxed items such as basic food if the Treasury is to balance the books.
The warning came from Britain’s leading independent economic institution, Niesr.
Martin Weale, head of the institute, said: “Unless these deficits are addressed, the country will go on getting poorer and poorer, and people will eventually wonder why there isn’t enough money for their pensions.”
The plans will be in the group’s Economic Review today.
The calculations are the latest message that Britain’s deficit cannot be tackled by cutting spending alone, although many experts presume the recession would return if VAT were paid on basic items or income tax became prohibitively high.
