Attention, Britain: Hold on tight to that wallet

Liverpool Central Library, 11March2015, Photo: Anthony Moretti

Liverpool Central Library, 11March2015, Photo: Anthony Moretti

The Times reports that the dreaded “t” word is being uttered in Britain.

Tax receipts will exceed 37 per cent of national income for the first time since Margaret Thatcher’s government in 1986 when she was aggressively paring back the size of the state, according to forecasts by the Institute for Fiscal Studies (IFS). Spending on public services, by contrast, is projected to fall to 2003 levels during this parliament at just under 38 per cent of GDP.

To balance the books, the government plans to rely more on tax, the IFS said in its annual check on the health of the economy. Another £17 billion of increases are planned this parliament.

Paul Johnson, IFS director, warned that the tax burden was likely to rise further. The government has to find another £40 billion of savings in the next parliament if it is to fulfil its promise of generating a budget surplus by the early 2020s, he said.

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