PwC says Budget measures not enough
Economists sees need for big tax rises or substantial spending cuts over and above Budget measures
Jon Hawksworth, PwC
Extra taxes of up to £26bn per year will be required to restore the economy
to health or cut public spending by up to 17%, according to a report from PwC.
The firm is reported saying the public deficit is so large that economic
control will have to be harsher than outlined in Alistair Darling’s Budget
earlier this year.
PwC’s head of macro-economics at PwC is quoted in
The
Times saying: “Failing to fix the public finances would risk persistently
high interest rates, a more volatile currency and a less certain environment for
business.”
The firm believes whichever party is elected it will have to restore the
Budget to balance by 2015-16 rather than 2017-18 has laid out in the
chancellor’s plans.
A third option open to government is to raise taxes by £13bn and cut spending
alongside a cut of in spending of 13%.