JEREMY Hunt today admitted taxes will stay “higher for a while” as Brits face plummeting living standards.
The Chancellor defended his decision not to slash income tax at yesterday’s Spring Budget, instead insisting the government will make cuts “when we can”.
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He said income tax needed to stay put to pay for household energy bill help and cost of living support packages.
“Those all have to be paid for,” Mr Hunt told the BBC.
“I think it is the right thing to do to get through these difficult periods.
“But we have to be honest with people. It means that for a while the burden of tax is going to be higher.
“But Conservatives cut taxes when we can.”
Following the Spring Budget – which included a 6% hike in corporation tax – Britain faces its highest tax burden since WW2.
Taxes as a share of GDP are set to hit 37.7% by 2027-28.
That’s a 4.7 percentage point increase since 2019-20.
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While the Office for Budget Responsibility predicts the UK will AVOID a recession, living standards are forecasted to plummet.
Typical household disposable incomes are on course to be lower by the end of 2027 than they were pre-pandemic.
Analysis from the Resolution Foundation found that even if the slow growth of the past decade continued, incomes would still be £1,800 higher than projected for 2027.
Torsten Bell, Chief Executive of the Resolution Foundation, said: “Jeremy Hunt’s first Budget was a much bigger affair than many expected, combining improvements to the dire economic and fiscal outlook with a significant policy package aimed at boosting longer-term growth.
“But stepping back the UK’s underlying challenges remain largely unchanged.”
He added: “We are investing too little and growing too slowly. Our citizens’ living standards are stagnant.
“We ask them to pay higher taxes, while cutting public services. No one Budget could turn that around, but it’s time Britain did.”
