Government and opposition in 'conspiracy of silence' over economic challenges, think tank says

The chancellor has admitted the overall tax burden is rising but insisted he wants to cut taxes further, ITV News' Correspondent Harry Horton and ITV News' Political Editor Robert Peston has more

A think tank says the Conservatives and Labour are both joined in "a conspiracy of silence" over what will happen to public finances after the election.

In a biting response to the chancellor's Budget, director the Institute for Fiscal Studies Paul Johnson said: “This was not a Budget which addressed the real challenges we are facing because it was not transparent about what those challenges are.

“Government and opposition are joining in a conspiracy of silence in not acknowledging the scale of the choices and trade-offs that will face us after the election", he said.

“They, and we, could be in for a rude awakening when those choices become unavoidable.”

The chancellor cut National Insurance by 2p in the Budget on Wednesday, saving the average worker £450.

The PM and the chancellor have also promised to scrap National Insurance altogether, but this had led to some criticism.

"Everyone in work is paying tax twice, once in income tax and once in National Insurance, that's unneccessarily complicated... but it's also unfair", Rishi Sunak said.

But Mr Johnson of the IFS said the promise to scrap National Insurance was "not worth the paper it's written on", unless the chancellor can explain how it will be paid for.

When asked if he was comfortable having the highest tax burden in 70 years, Rishi Sunak said "the country's been through hopefully once in a century type events with the pandemic and the war in Ukraine, and the government stepped in an extraordinary amount of support".

Another think tank, the Resolution Foundation, said this parliament will be the first "in modern history to se a fall in living standards", despite the national insurance cuts.

They also said the Budget tax giveaway has been funded by "fiscal fiction" public spending cuts.

James Smith, research director at the think tank, told a press conference on Thursday that “big cuts to public spending” are coming after the general election.

“The Government are pencilling overall day-to-day spending numbers beyond the end of the spending review, from 2025-26 onwards.", he said.

Labour leader Keir Starmer said the "government give with one hand and take much more with the other", and that there was "£46 billion of unfunded commitment".

Sir Keir said the government had learned "absolutely nothing" from Liz Truss' disastrous mini-budget.

In the Budget on Wednesday the chancellor also announced he was scrapping the non-dom tax status, an extension of the freeze on alcohol and fuel duty, and a new tax on vapes.

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