More finance woes for Brown
The National Institute of Economic and Social Research has claimed that taxes will have to be raised by the equivalent of 5p on income tax if a £20bn hole in the chancellors coffers is to be avoided.
Because economic growth will be slower than Gordon Brown believes, there will be a £20bn shortfall in the treasury by 2006, the think-tank said. Brown will not be able to borrow his way out of the situation leaving tax hikes as the only feasible solution.
The institute has joined the growing ranks of bodies that have become concerned over government coffers. Last week the Ernst & Young Item club said tax revenue would fall short by £7bn this year.
Two weeks ago Accountancy Age reported the Centre for Economics and Business Research predicting a further NIC hike of three pence in the pound by 2006.