More Tax Rises Needed in Future to Avoid £9 Billion in Spending Cuts: IFS

The government may need to raise more taxes in the course of this Parliament to avoid £9 billion in spending cuts, the Institute for Fiscal Studies (IFS) think tank has said. On Wednesday, Chancellor of the Exchequer Rachel Reeves delivered Labour’s first Budget in 14 years, announcing £40 billion in extra taxes, bringing tax on a path to 38.2 percent of GDP, which the IFS said was its “highest level ever in the UK.” Reeves also announced that public spending will increase by around £70 billion annually over the next five years and borrowing will increase by an average of £32.3 billion a year. In an analysis of the Budget delivered on Thursday, the IFS said that after taking into account inflation and the additional cost to public sector employers of rising national insurance (NI), day-to-day public service spending will rise by 4.3 percent this year, 2.6 percent in 2025, and then drop to only 1.3 percent in 2026 and each subsequent year....