Labour may have to consider hiking other taxes or restricting public spending if it puts cutting income tax or national insurance in its election manifesto, as is reportedly under consideration.
Paul Johnson, the director of the Institute for Fiscal Studies think tank, told BBC Radio 4’s Today programme he was “pretty surprised” to hear reports Labour was considering tax cuts.
He said “all of the pressure” was in the direction of spending more to shore up struggling public services, which would require raising more funds for the Exchequer.
“What you can do is cut some taxes while increasing other taxes by more, and that may be what the Labour Party are talking about,” he said.
“But what you can’t do given the state of the public finances, and given that both parties say that they’re focused on getting overall national debt down over the next Parliament, if you really want to do that, then you can’t cut taxes and increase spending.
“Indeed, you probably can’t cut taxes and keep spending anywhere near where it is. In other words, if you’re going to cut taxes net, get debt down, then you’re going to have, frankly, another period of austerity on public services.”
William Turner is a seasoned U.K. correspondent with a deep understanding of domestic affairs. With a passion for British politics and culture, he provides insightful analysis and comprehensive coverage of events within the United Kingdom.
