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Hammond hints at tax rises and end to austerity

Chancellor Philip Hammond admits election result showed the public was ‘weary’ of spending cuts.

Hammond hints at tax rises and end to austerity

Chancellor Philip Hammond, has hinted at tax rises to help fund an end to the government’s austerity programme after admitting the public were ‘weary’ of spending cuts.

In interviews on Sunday Hammond (pictured) said the government was ‘not deaf’ to the message delivered by the general election.

He said ‘people are weary of the long slog’ but indicated extra spending would need to be funded using tax rises, claiming a deficit of 2.5% of GDP was ‘not sustainable in the long term’.

‘We never said we won’t raise some taxes,’ he said.

Speaking on The Andrew Marr Show Hammond said he had changed the fiscal targets of his predecessor George Osborne. This created ‘a lot more flexibility to respond to the situation on the ground’ although he added that the country still needed to ‘live within our means’.

He ruled out any Summer Budget – a possibility following an election as was the case in 2015 – saying there would be a regular Budget in November in which the government would ‘set out our future plans for public spending, for taxation, for fiscal balance and everything else that needs to be clear.’

Speaking on Peston on Sunday Hammond gave his view on the Conservatives’ recent election campaign. ‘It was a mistake of the campaign not to focus more on an area where we have a great story to tell, a record on the economy since the great recession rebuilding this economy over the past seven years,’ he said.

He said that making the timetable for deficit reduction longer, into the middle of next decade ‘gives us more space to respond to what is happening in the economy.’ 

7 comments so far. Why not have your say?

In the Dark

Jun 19, 2017 at 13:37

It would be helpful to make shure that government was efficient before embarking on tax hikes and not just pandering to the Oliver Twist begging bowl.

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Jun 19, 2017 at 18:43

Best would be to lower the point at which 45% income tax is payable to, say, £100k. I can't imagine that wealthier people would mind paying a bit more to help the economy.

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Jun 20, 2017 at 09:27

It is unfortunate that it took the real threat of the neo-Marxist opposition to start to bring the complacent Conservative government to its senses, and the threat is not over yet.

We are faced with a summer of discontent with militant politically driven unionism trying to overthrow the government, and riots in the streets planned and implemented by Momentum, the extreme left-wing 'stormtroopers' of what was once a credible, viable Labour Party. Welcome back to the 70s and 80s!

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Michael Stevens

Jun 20, 2017 at 09:48

Simple: tax increase 3p on petrol. Over 80% of motorist do not drive economically, so are not worried about the fuel cost, driving SUV etc

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Jun 20, 2017 at 10:25

My bet would be they will cut tax relief on pension contributions. Move it to 25% for everyone (say). Personally I'd much rather see a rise in fuel duty, but they can probably spin the pension changes to make it look like it is 'progressive'.

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David J Robertson

Jun 20, 2017 at 12:33

A really radical approach, would be increase the tax on MP's to say 80%. OK it won't happen.

Actually pay MP's by performance and reduce the number of MP's. Here's a challenge ----- name them all.......

Seriously, Hammond will hit car drivers and pensions both softer targets

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In the Dark

Jun 20, 2017 at 21:52

So! no doubt the private sector will take the hit, obviously it has to fund its own future and support the public sector. The Conservative Government could have been more radical and put the public sector pensions on defined contribution similar to the private sector thus reducing exenditure over time.

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