Raise taxes for all to improve services, says ex-chancellor
By David Wood | 31st October 2022
All earners in the UK will need to pay higher tax if public services are to improve, ex-chancellor Lord Philip Hammond has warned.
Lord Hammond told the BBC that the next few months could be "incredibly difficult" for many people.
His comments came after Levelling Up Secretary Michael Gove refused to confirm whether benefits would rise with the soaring cost of living.
Lord Hammond questioned how more support for the vulnerable would be paid for by the current government.
The former chancellor, who served under Theresa May, said that Rishi Sunak now faces a "huge challenge" trying to balance the government's books and boost the economy at the same time.
He told the BBC's Laura Kuenssberg Sunday programme that stricter rules on borrowing would need to apply in the wake of the mini-budget.
"Borrowing is no longer on the table after the market tantrum... And that applies to a Labour government wanting to offer more public spending, just as it applies to a Tory government wanting to borrow to cut taxes," he said.
In Rishi Sunak's first speech as prime minister, he said he would "fix" the mistakes made during his predecessor's time in office.
Chancellor Jeremy Hunt needs to find billions of pounds of savings to keep the UK's debt under control.
However, Lord Hammond said that he would be "very surprised" if the government did not decide to increase benefits in line with the soaring cost of living.
Lord Hammond added: "They're going to have to come up with a growth plan. Without growth we're not going to be able to solve the problems our public services are facing and solve this conundrum that people don't want to pay higher taxes but they do want better public services - the only way you can resolve that is higher growth.
"Of course you can tax wealthy people a bit more but the reality of the fiscal challenge we face is that if we want public services not just to be maintained but to be improved...everybody, including ordinary earners, are going to have to pay more tax."
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