Rishi Sunak has delivered a spend now, tax later Budget to drag the UK economy out of the Covid-19 crisis, with a short-term boost to business investment followed by the largest tax rises on companies and households for a generation. The chancellor will spend £65bn in the next two years supporting jobs, investment and the recovery as the country tries to recover from the Covid-19 crisis. But this will be followed by £25bn a year of corporate tax and income tax rises by the middle of the decade.
Sunak is the first chancellor to raise corporation tax rates since Labour’s Denis Healey in 1974. His planned tax rises will in 2025-26 leave Britain with its highest tax burden — 35 per cent of GDP — since Roy Jenkins was Labour chancellor in the late 1960s.
Conservative MPs cheered Sunak when he addressed them at a private meeting on Wednesday night and there was only muted criticism of the tax rises. “He’s a Tory,” said Charles Walker, vice-chair of the Tory 1922 committee.