Numerica clashes with Treasury over spending plans
Taxes will have to rise 'significantly' to meet the government's spending plans, accounting firm Numerica has warned.
With public spending set to rise by 13.4% over the next four years but the economy predicted due to grow only 10.75%, the Treasury will be left with a £25billion shortfall by 2007/08.
Numerica chief economist Maurice Fitzpatrick said this shortfall is the equivalent of 8p on the standard rate of income tax.
‘For the Treasury’s figures to add up, there has to be a significant increase in the amount of tax raised,’ he said.
‘The Treasury have yet to explain how this will come about.’
However, the Treasury hit back by claiming that Numerica had not taken into account extra tax receipts generated by economic growth.