Labour Refuses To Rule Out Post Election Tax Increases

by Jason Gorringe, Tax-News.com, London

08 April 2005

As the UK general election campaign began in earnest this week, reports suggested that most experts are braced for increases in taxation should the Labour Party secure a third term in office, especially since Prime Minister Tony Blair has refused to rule out the inclusion of tax rises in Labour’s forthcoming election manifesto.

According to Labour Party officials, Blair is set to pledge the government to a £95 billion public spending programme for the next six years, and is unlikely to discount raising more revenues from taxation in order to fund the spending initiatives, the Daily Telegraph has reported.

Moreover, economists remain concerned over the state of the public finances, with figures earlier this week revealing a £34 billion shortfall for the last financial year.

The report reflects the general consensus held by some of the UK’s foremost economic experts that taxes are set to rise under a third Labour term, according to a poll by the Telegraph.

Of the 26 economists surveyed, 23 believe that a Labour victory will result in higher taxes.

“Will taxes have to go up if Labour wins? Yes, if we are right that revenues will be weaker than the Treasury hopes and if Gordon Brown sticks to his Budget goals for the public finances," Robert Chote of the Institute of Fiscal Studies was quoted by the paper as observing.

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