Sir Tony Blair has warned that Sir Keir Starmer will have to put up taxes by more than £50 billion unless he comes up with radical new ways to improve productivity.
The chief economist at the former prime minister’s institute forecast that taxes would have to go up by 1.9 percentage points of GDP by the end of the Parliament to stabilise debt.
Tax rises would also be needed to meet increasing health costs caused by an ageing society, to plug the decreasing tax take from oil and gas as part of the transition to net zero and to avoid austerity, a report from the Tony Blair Institute says.
It suggests Sir Tony does not believe Sir Keir’s growth agenda will be enough to meet the challenges of the future. In a speech at a conference in London on Tuesday, the former prime minister will call for greater use of artificial intelligence to boost growth.
“Britain is facing an unenviable triple whammy of high taxes, heavy debt and poor outcomes,” he will say. “And worse is to come with the demographics of an ageing population against us, deep structural health problems and rising numbers of long-term sick.
“The simple and unavoidable truth is that, unless we improve growth and productivity and drive value and efficiency through our public spending, we’re going to become poorer. Much poorer.”
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