Labour ex-chancellor Alistair Darling warns Rishi Sunak it would be a ‘big mistake’ to increase taxes now and it could ‘derail’ the UK’s recovery from the coronavirus crisis
- Ex-chancellor Alistair Darling warned Rishi Sunak not to increase taxes at Budget
- Lord Darling said it would be a ‘big mistake’ for Mr Sunak to put up taxes now
- He warned such a move could ‘derail’ the UK’s recovery from coronavirus crisis
Alistair Darling today warned Rishi Sunak it would be a ‘big mistake’ to put up taxes at the Budget on March 3.
The Labour ex-chancellor said increasing levies now could threaten to ‘derail’ the UK’s recovery from the coronavirus crisis.
He said if he was still in Number 11 Downing Street he ‘would not want to be taking money out of the economy just now’.
His comments came as Paul Johnson, the director of the Institute for Fiscal Studies, said he believed there are ‘some tax rises coming down the line but I don’t think we are going to get big tax rises this time around’.
Alistair Darling, the Labour former chancellor pictured before the Budget in March 2010, today warned Rishi Sunak against hiking taxes at the Budget on Wednesday
Reports suggest Mr Sunak is planning to increase the rate of corporation tax from 19 per cent to as high as 25 per cent
Mr Sunak will deliver his Budget on Wednesday this week amid reports he will hike corporation tax from 19 per cent to as high as 25 per cent.
The Chancellor is also said to be considering freezing the minimum threshold for income tax at £12,500 and the higher rate threshold at £50,000 in moves which could generate an extra £6billion for the Treasury.
Lord Darling, who was chancellor in the wake of the 2008 financial crisis, today warned Mr Sunak not to put up taxes this year.
He told Times Radio: ‘My view is that we have to stay that course. I would not want to be taking money out of the economy just now.
‘I think that when the Tory/Liberal coalition government took office in 2010 it made a big mistake in assuming it was ok to start cutting into things, that’s what is now known as austerity, which meant that we never really got a sustained recovery.
‘The economy bumped along for about eight or nine years before of course the pandemic then hit.
‘I think it would be a big mistake to take money out of the economy this year.’
Ministers have borrowed record amounts during the pandemic to prop up businesses and families, with public sector debt now continuing to climb above £2.1trillion.
Lord Darling said ‘clearly all of this has got to be paid for one day’ but he added that ‘this is not the year to be doing it’.
‘Tax rises will come, my guess is in the next couple of years or so, make no mistake about that,’ he said.
‘But of course one of the things that helps you with your tax revenues is a growing economy because the more people in work and if they are earning more then you get more taxes coming in.
‘So it is in our interests to make sure that we get a well-grounded and solid recovery rather than starting to do things that could easily derail that recovery with the result that the cost in the long-term will be far greater for us.’
Meanwhile, Mr Johnson told Sky News that he expects Mr Sunak to delay significant tax rises.
‘I think we have got some tax rises coming down the line but I don’t think we are going to get big tax rises this time around,’ he said.
‘There is so much uncertainty about what is going to happen to the economy over the next year.
‘There is so much uncertainty actually about how much tax we are going to need in the medium term and the focus at the moment I think is getting the economy back on its feet.’
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