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The duel: are tax rises now inescapable?

Post-Covid, are taxes hikes essential to fund the future? Or should we abandon “deficit fetishism” and spend our way to prosperity?

Photo: Dominic Lipinski/PA Archive/PA Images

Yes—Jonathan Portes

Over a mere four months this summer, the government borrowed £150bn, pushing the UK’s debt-GDP ratio over 100 per cent for the first time since the Chatterley trial, the Beatles’ first LP and (for Larkin) the dawn of sexual intercourse. Does the highest debt ratio in over half a century mean taxes must go up? On its own, absolutely not. At current long-term interest rates, we can finance the extra borrowing for well under £1bn a year—a rounding error.

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