'Tax rises needed' to curb national debt
Tax rises will be needed to curb national debt, leading thinktank says
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Wednesday, 21, Oct 2009 11:19
A leading thinktank has said tax rises will be necessary to curb rising national debt.
The National Institute for Economic and Social Research (NIESR) said the government could have to put seven pence in the pound on the basic rate of income tax to control national debt.
The group said it expected the UK economy to return to growth by the end of the year.
NIESR also warned spending cuts and an increase in the retirement age were inevitable. "No politician so far has addressed the scale of the problem," the thinktank said.
"The build up of government debt, which may reach 93 per cent of GDP by 2015, will leave a burden for our descendants," it added.
NIESR also said VAT could be extended to be added on to more goods and the imposition of a public sector pay freeze could help calm the growing national debt. These measures would raise two per cent of GDP, NIESR concluded.