More NewsTop economist stokes tax row

Top economist stokes tax row

Citigroup’s Michael Saunders says Tories were “probably right” about Labour’s need to raise taxes further after the next election

One of the UK’s leading economists has backed shadow chancellor George
Osborne’s claim that Labour are planning a “bombshell” tax increase after the
next election.

Osborne this week was forced to backtrack after saying that a Labour plan for
a £14.8bn increase was “secret” after it transpired that the information was
publicly available in the Budget red book.

Osborne’s comments however received tentative support from Citigroup’s chief
economist Michael Saunders who said the conservatives were “probably right” to
make the claim.

“The Conservatives are probably right to argue that extra tax hikes would be
needed to create the revenue rebound forecast in the Budget,” he said.

But he cautioned that “the Government’s claim that it has no actual plans for
tax hikes may also be valid”.

Osborne faced a barrage of criticism from his political rivals after accusing
the government of hiding planned tax rises.

Vince Cable, the Liberal Democrat shadow chancellor, yesterday attacked
Osborne and conservative leader Cameron as “callow and pitifully ill-equipped –
politically, morally and intellectually – for the task ahead.”

Osborne today maintained that Labour planned to continue running the economy
“much as before, with a few tweaks hear and there” if they won the next
election, which he insisted was “a dangerous fantasy”.

Further reading

Tories
pledge to put PFIs on balance sheet

Darling’s
£32bn ruse

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