Demands made for 6p income tax hike

Calls have been made by an influential think tank for sweeping tax hikes to
be made.

The National Institute of Economic and Social Research said the basic rate of
income tax to be raised by 6p in the pound.

“Further fiscal retrenchment is necessary just to lower government borrowing
to below 3 per cent of GDP by 2020,” the NIESR said.

“On the baseline we assume it is achieved through income taxes rising by an
equivalent of six pence in the pound on the basic rate. VAT receipts will be
held back by weak consumption and higher saving.”

The body also called for the zero rate of VAT to be scrapped on everything
except for food and children’s clothes.

It will take at least another £15bn of spending cuts will be required to fix
the public finances , the body said.

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