Former Chancellor Says Tax Rises Unlikely Before 2024

Philip Hammond, ex chancellor from 2016 to 2019 under Theresa May's government, has said he believes that tax rises are unlikely to be put in place during the current parliament. Hammond spoke recently at Avalara Inspire Digital 2020 and suggested there were two key reasons why taxes wouldn’t be increased. Firstly a rise in taxes may well do more damage to the economy, and that secondly it would be a difficult political decision to decide to increase them.

He says "It would be probably unwise to impose significant tax increases, to start fiscal tightening before the recovery is well under way and that may well take a couple of years. The only way to raise significant amounts of additional revenue is with broad based taxes that affect the majority of people. That will be a very, very painful and difficult political decision and frankly, I don't see this government making it. I don't expect us to reach that stage this side of the next general election."

With furlough schemes coming to an end, harder times may well be ahead, and the current government have suggested that in the short term, taxes will not be increased.

Hammond continued by saying "The broad principle of a big fiscal stimulus coupled with a big monetary stimulus was surely the right way to go. The challenge of course for government is that that can't go on forever. It has to be stopped and the generosity has to be withdrawn. That in itself will be a painful moment. I expect that we will see unemployment starting to rise quite sharply in the UK in October as we come to the end of the furlough scheme. Businesses have to decide which of their employees they really can afford to keep on and which they're going to let go".

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