LONDON (Reuters) – Britain’s new finance minister Rishi Sunak will have to raise taxes rather than rely on tweaks to budget rules if he wants to really ramp up spending in a first post-Brexit budget next month, the Resolution Foundation, a think-tank, said.
FILE PHOTO: Britain’s Chancellor of the Exchequer Rishi Sunak is seen outside Downing Street in London, Britain, February 14, 2020. REUTERS/Peter Nicholls
Sunak is due to announce the tax and spending plans of Prime Minister Boris Johnson’s new government on March 11.
His predecessor Sajid Javid unexpectedly quit less than two weeks ago, leading to speculation that Johnson wants to raise spending by more than Javid’s budget rules allow.
Johnson plans to help voters in struggling regions who backed him in December’s election by spending more on infrastructure, a big shift for the Conservative Party which has focused on fixing the public finances for the past 10 years.
“But new roads and rail lines are only part of the story,” Jack Leslie, a Resolution Foundation economist, said.
Johnson has also announced the biggest increase in spending on day-to-day public services in 15 years.
“Higher spending will require higher taxes,” Leslie said.
Britain’s fiscal forecasters assess each bud