Pay the Bill: UK Eyes Big Tax Rises After Government Coronavirus Spending Spree

LONDON, ENGLAND - MARCH 20: Chancellor of the Exchequer Rishi Sunak speaks during a daily press conference at 10 Downing Street on March 20, 2020 in London, England. During the press conference, British Prime Minister Boris Johnson told pubs, cafes, bars, restaurants and gyms to close, whilst Chancellor Rishi Sunak …
Julian Simmonds - WPA Pool/Getty Images

The Treasury is reportedly considering tax rises to the tune of up to £30 billion to cover the cost of the government’s coronavirus response spending spree, with the department even contemplating raising the tax on petrol which would affect millions of ordinary Britons.

Faced with the rising bill for the government’s coronavirus stimulus packages, Chancellor of the Exchequer Rishi Sunak is said to be considering raising taxes on businesses, pensions, and higher earners, in what The Telegraph described as the largest series of tax rises in a generation.

The Sun also reported on Monday that the chancellor is even considering a rise of 5p a litre on car fuel, ending a ten-year freeze on the duty.

Conservative MP Robert Halfon condemned the speculated fuel rise, telling the tabloid: “Now is not the time to clobber workers, families, white van men and women and our public services with a fuel duty increase.”

The revenue is needed after the government shut down large parts of the economy in the face of the threats it perceived from the coronavirus pandemic. It introduced a job retention scheme in March which pays British workers to stay at home.

Breitbart London reported that in May, the programme left half of the adult population being paid by the government. By the end of July, it had cost British taxpayers £31.7 billion and is expected to rise some £14 billion for every successive month, though the programme is starting to wind down.

Other schemes by the chancellor, such as Eat Out to Help Out, cost British taxpayers £600 million.

National debt exceeded £2 trillion for the first time in July, with the deficit set to top £300 billion this year. Last month, the UK officially went into recession for the first time in 11 years, after the economy shrank 20.4 per cent compared to the first three months of the year — one of the largest shrinkages in Europe and the deepest recession among top global economies.

Amidst the rises in tax being considered for November’s budget is an increase in corporation tax from 19 per cent to 24 per cent, according to The Sunday Times, leading to Conservative MP John Redwood to warn: “You cannot tax your way to faster growth and more prosperity. We need policies to promote more jobs and activity to get the deficit down.”

Business leaders told The Telegraph that they were concerned added taxes could dent the UK’s competitiveness internationally at a time when the country is set to launch itself as fully independent of the EU. One anonymous Cabinet minister told the newspaper yesterday that to pay for COVID, the government needs to grow the economy, by cutting “corporation tax and other taxes to increase transactions”.

“Putting taxes up now would be like acid rain falling on the green shoots of recovery. If you increase capital gains tax, for instance, people will just stop selling their assets, so you will get less tax revenue,” he said.

A former senior figure in the Labour Party, John McDonnell, even accused the Tories of stealing plans to raise corporation and capital gains taxes straight from their far-leftist manifesto.

Media also reported that the government was considering scrapping the David Cameron era 0.7 per cent GDP pledge to foreign aid, an unpopular policy with some quarters of the right of the Conservative government over its wasteful distribution. However, a government source told The Times that the government will keep the multi-billion-pound international handout as retaining it was a manifesto pledge.

.

Please let us know if you're having issues with commenting.