LONDON: Taxes would rise to their highest ever levels during peacetime and levels not seen since the 1980s, respected think-tank the Institute for Fiscal Studies (IFS) has warned.
Labour’s plans for tax hikes aimed at top earners and businesses may “not raise anything like” the £48.6 billion claimed and their proposals could turn out to be “economically damaging”, said the group.
The IFS said Labour had not laid out an honest set of choices.
Deputy director Carl Emmerson said: “For Labour we can have pretty much everything – free higher education, free childcare, more spending on pay, health, infrastructure.
“And the pretence is that can all be funded by faceless corporations and ‘the rich’.
“There is a choice we can make as a country to have a bigger state. That would not make us unusual in international terms.
“But that comes at a cost in higher taxes which would inevitably need to be borne by large numbers of us.”
He added: “There is no way that the tens of billions of pounds of tax rises they promise could come from the top five per cent of earners and big business.”
The IFS also said that the Conservatives had also failed to lay out an honest set of choices, and represent further years of austerity, which could hit public services.
“Additional funding pledges for the NHS and schools are just confirming that spending would rise in a way broadly consistent with the March Budget.
“Compared with Labour, they are offering a relatively smaller state and consequently lower taxes.
“With that offer come unacknowledged risks to the quality of public services, and tough choices over spending.”
The IFS also said the Tory focus on reducing immigration could cause economic damage.
The Office for Budget Responsibility has already downgraded its forecasts for tax receipts by £6 billion in 2020-21 – and rising thereafter – due to lower expected net immigration.
