Tory grandees warn tax hikes WILL be needed to fill massive black hole in the government’s finances as they claim the UK’s debts are WORSE than official figures suggest
- Ken Clarke and John Penrose have raised fears about scale of Britain’s debts
- Former ministers said ministers were ‘kidding themselves’ about the issue
- Said tax rises and spending curbs inevitable if the books are to be balanced
Tory grandees have warned tax rises will be needed to fill the massive black hole in the public finances – claiming the government is kidding itself’ about the scale of the problem.
Former chancellor Ken Clarke and ex-minister John Penrose said the ‘scale and depth’ of Britain’s debt problem was being underestimated.
The pair wrote to Chancellor Philip Hammond last week emphasising their anxiety about the way public debt is calculated.
They pointed out that the Government’s future liabilities, such as public sector pensions, are not included in Treasury figures.
‘We are concerned that the Treasury’s traditional focus on gilts as the principle measure of Government debts gives an over-optimistic picture of the true scale of long-term IOUs which taxpayers are committed to paying,’ the senior Conservatives wrote.
‘No company CFO (chief financial officer) would last long if they only bothered with their firm’s bonds and ignored all their other liabilities completely.’
According to the Sunday Telegraph, the MPs added: ‘Under-reporting or ignoring the problem just means we are kidding ourselves about the scale and depth of the problem which we are bequeathing to future generations of taxpayers.
‘It is neither honest nor fair to let accountancy hide economic reality.
‘You or your successors will either have to raise taxes substantially, or cut important public services deeply and none of us, as Conservatives, want to leave such a cold, mean future to our children and grandchildren.’
A Treasury spokesman said: ‘The Chancellor set out the economic and fiscal position in the Spring Statement.
‘The Government takes a balanced approach to repairing the public finances, reducing debt and investing in our vital public services.’