Tax hikes have been speculated for a number of weeks as the cost of lockdown measures implemented within the UK continue to rise. While non-essential businesses can now open, and other facilities are following shortly behind, the economy has taken a hit in the past few months. This has only been exacerbated by high levels of government spending to fund relief schemes such as furlough and the Self-Employed Income Support Scheme.
On Wednesday, the Chancellor Rishi Sunak revealed the latest measures of government support in his summer statement.
While not a full Budget, the economic update provided further insight into measures the government was taking to get the economy back on its feet.
This included a holiday on Stamp Duty, and a ‘Eat Out to Help Out’ scheme, providing discounts for eating in restaurants in the month of August.
The measures contained within the statement were focused on job creation and sustainability, but are likely to cost the government another £30billion.
This will bring the total government cost thus far to £190billion in the last few months.
The IFS, however, did scrutinise the Job Retention Bonus announced by Mr Sunak, questioning its value.
The Job Retention Bonus allows employers to receive a bonus of £1,000 for every furloughed worker they bring back and retain until at least the end of January.
However, the organisation stated companies were likely to have brought back their workers anyway, and thus the cost was unnecessary.
Mr Sunak was asked on LBC whether there could be tax rises this year, but did not answer the question outright.
He responded: “We’ll have to return our public finances to a sustainable position over a reasonable period of time – that’s the right thing to do for the economy.
“Not least because, as we’ve seen, things come along and we need to have the strength to respond to them.
“I will make the decisions that are required, as difficult as they may be. I’m not unafraid to make whatever difficult decisions are required.”