The Chancellor could take the tax burden even higher

This morning on the media round, Jeremy Hunt followed in the footsteps of Tory chancellors before him warning about the ‘very difficult decisions’ that lie ahead. The new chancellor’s language and tone could easily be compared to George Osborne after the financial crisis, explaining to the country why government spending needed to be curbed. Or to Rishi Sunak, towards the end of the crisis stage of the pandemic, who was constantly reminding MPs and the public about the ‘difficult times ahead’ due to the fallout from economic shutdowns and unprecedented peacetime spending.

The crucial difference, however, is that this new talk of spending cuts and higher taxes is in response to a crisis of the government’s own making. Yes, rising interest rates and costs for government borrowing are going up worldwide: but Liz Truss’s mini-Budget last month put the UK in the spotlight, and the UK’s borrow-and-spend agenda (which mirrors most Western countries right now) became most heavily punished by the markets.