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Government 'will raise taxes in future'

Householders could be hit by future income tax rises as the government attempts to bring down the national deficit, analysis from the Institute for Fiscal Studies (IFS) warns.

The economists anticipate that around 3p will be added on to the basic rate following the next general election, in an effort to balance the books, the Daily Mail reports.

In the Budget earlier this week, Mr Darling said that the current 22p rate of income tax will be reduced to 20p next month.

IFS director Robert Chote commented: "All in all, there is a danger that we are seeing the history of Labour's second term repeating itself.

"Gordon Brown insisted repeatedly after his forecasts began to go awry in 2002 that there was no problem with the public finances - but as soon as the 2005 election was won he announced a spending squeeze and introduced a series of tax-raising budgets."

Further IFS Budget analysis suggests that, under this year's proposals, the richest 50 per cent of the UK population will suffer a 0.2 per cent fall in income.

However, this will be counterbalanced by the 0.6 per cent financial boost to be enjoyed by the remainder of the population.

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