The Government has been left with a debt pile at around 100pc of GDP, levels not seen since the 1960s. With growth unlikely to be an effective cure, most experts expect spending cuts or tax rises will be needed to stop public finances becoming unsustainable. Amid a backdrop of austerity fatigue, tax rises are seen as the most likely, if not only, remedy.
“Tax is going to be very central to the whole issue of fiscal consolidation and how we deal with the deficit,” says Stride. He urges the Chancellor to provide a road map for the public finances at the Autumn Budget.
“The pressures on tax will be potentially very considerable and obviously in the manifesto there was the triple lock for no increase in the rates of income tax, national insurance or VAT. The problem is those are three very heavy-lifting taxes.”
He warns that “very, very hard decisions” will have to be taken on tax.
The Treasury Committee has launched a sweeping inquiry into tax after Covid-19 and Stride says he wants to look at “inter-generational fairness” in particular. “When I went to university it was paid for by the state, that is now not the case. When I was younger I could just about get on the property ladder, a lot of younger people are struggling to do that.”
He says younger Britons have a “tougher deal when it comes to life changes and the economy than older people”, and are bearing the brunt of the crisis caused by the virus.
“I think now is a very timely moment to have a good look at tax. There might have to be some radical things that Government does.”