IFS: £40bn a year tax rises needed to stop debt ‘spiralling’

The Institute for Fiscal Studies (IFS) says the Chancellor will need to raise taxes by more than £40bn a year by 2025 to balance the books and "stop debt spiralling out of control", with government borrowing set to hit £350bn this year. The IFS’ Green Budget suggests ministers should take advantage of cheap borrowing costs to provide further support to the economy for at least 18 months. The report says the Government has increased spending on day-to-day public services by £70bn in response to the pandemic, adding that even if three-quarters of that was to stop this year, it would still add £20bn to public sector borrowing by 2024/25. IFS director Paul Johnson said: “Tax rises, and big ones, look all but inevitable, though likely not until the middle years of this decade."