Tax rise fear over £85bn Brown debt
GORDON BROWN has plunged the nation deeper into the red by at least £85billion in just one year.
This massive overspending has fuelled fears that hefty tax increases will be needed to plug the black hole in Britain’s accounts.
The increased Government debt would equal about 28p on top of basic income tax.
It means that public liabilities have soared over the last 12 months by the equivalent of more than £3,500 for every British household.
It casts new doubts on the Chancellor’s economic record, just as he prepares to succeed Tony Blair as Prime Minister.
Mr Brown is also reeling from the revelation that his own civil servants warned him his £5billion-a-year tax raid on pension funds in 1997, widely blamed for helping to trigger the collapse of Britain’s retirement savings industry, would have a devastating impact.
The latest national-debt figures were based on analysis of an increase between March 2006 and now, in three key public-sector liabilities – the amount which would technically have to be found if the debts were called in.
Taxpayers have been saddled with a £16billion rise, to £118 billion, in what Mr Brown expects to borrow by 2010-11.
Shadow Chancellor George Osborne said: “Not only do we already have a record tax burden but taxpayers are liable for a massive and increasing level of debt, which independent experts predict could see taxes rise even further.” The director of the National Institute of Economic and Social Research, Martin Weale, said: “These liabilities mean taxes will eventually have to rise.’’
A Treasury spokesman said net debt was lower than the European average and America, and was the second lowest in the G7 group of countries.
On pension funds, he added: “What really matters is the annual cash requirement to pay pensions benefits, as set out every year in the long-term public finance report. This remains fully affordable.” Labour splits over Mr Blair’s successor deepened yesterday after an ally of the Premier, John Hutton, said it would be “a good thing” if
Mr Brown faced a serious challenger.
He stoked up pressure on Environment Secretary David Miliband to enter the contest.
But Foreign Secretary Margaret Beckett warned against an ‘’artificial’’ battle and said Mr Miliband would just be offering himself as a “human sacrifice’’.
