Andy Burnham, Labour mayor of Greater Manchester, says news would be ‘profoundly depressing’
In a report last week the Institute for Fiscal Studies said the current parliament was likely to mark “a decisive and permanent shift to a higher-tax economy”.
In its report, it also said that although this was partly because of the pandemic, government decisions taken before Covid were a more important factor. It said:
Only during and in the immediate aftermath of the two world wars have government revenues grown by as much as they have in the period since 2019. To some extent, this ought not to be a surprise: the Covid-19 pandemic represented the most significant economic dislocation since the second world war. But while the response to the pandemic and its after-effects does explain some of the tax rises announced in recent years, it is far from the only – or even the most significant – explanation. Instead, tax rises have largely been the consequence of a desire for higher government spending on things that pre-date the pandemic (such as manifesto promises to expand the NHS workforce and hire more police officers, and a September 2019 declaration to be ‘turning the page on austerity’).
I disagree with that analysis. One of the biggest reasons that we’ve had to see taxes go up is because our debt interest payments have gone up as a result of the energy shock. That has an enormous pressure on the public purse.
The other thing I disagree with the IFS on – normally I don’t disagree with them, I do this time – is their suggestion this is a permanent rise in the level of taxation. I don’t believe it has to be. If we are prepared to take difficult decisions about the way we spent taxpayers’ money, to reform the deliver of public services, to reform the welfare state, there’s a chance to bring taxes down. But there aren’t any short cuts.
Continue reading...This post was originally published on Human rights | The Guardian.
