Institute for Fiscal Studies director, Paul Johnson, says "big tax rises and big borrowing" in the Budget were inevitable to improve public services and secure long-term investment.
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00:00It was inevitable that we were going to see increases in income tax or National Insurance
00:05or VAT. We knew that a big tax rise was coming and was needed and if you want a big tax rise
00:12you have to do it on one of the three big taxes. So I'm not complaining in a sense that the
00:18government has chosen to do it on National Insurance, it's just that I don't think it
00:22was terribly transparent about that previously. Obviously more money on public services will help
00:28people using those public services. Waiting less long for the NHS will make people waiting for the
00:34NHS better off. That's being paid for and of course it's being paid for by people and largely
00:40by working people because that they are the ones who will face the costs of the higher
00:45National Insurance contributions on employers. That's made very plain in the OBR documentation.
00:51They think three quarters of that will result in lower incomes for households. I think for a
00:58government coming in, looking at the state of public services, really wanting to improve the
01:03NHS, really wanting to put more money into education and so on and looking to long-term
01:08investment, I think they did need to do something on this scale. Big tax rises
01:13and indeed big borrowing for that additional investment.