Britons warned of rising taxes, spending cuts

The British Treasury has warned that taxes will go up as the government moves to address what has been described as an "eye-watering" black hole in public finances.

British Prime Minister Rishi Sunak met with Chancellor of the Exchequer Jeremy Hunt on Monday to discuss the government's tax and spending plans that are to be laid out in next month's fiscal statement.

The Financial Times cited Treasury sources as saying that while "those with the broadest shoulders should be asked to bear the greatest burden", everybody's taxes would go up.

It reported that tax increases and public spending cuts worth up to 50 billion pounds ($57.84 billion) are required.

"It is going to be rough. The truth is that everybody will need to contribute more in tax if we are to maintain public services," one source said.

"After borrowing hundreds of billions of pounds through COVID-19 and implementing massive energy bills support, we won't be able to fill the fiscal black hole through spending cuts alone."

The Daily Telegraph cited Treasury sources as saying the shortfall will be filled through a combination of 50 percent tax rises and 50 percent public spending cuts.

The Financial Times' report noted that the Treasury is likely to focus on "stealth" tax measures like freezing income tax thresholds.

The government is understood to have ruled out increasing the rates of income tax, national insurance and value-added tax, as this would breach the Conservatives' 2019 manifesto, the Telegraph reported.

Sunak and Hunt already agreed last week that major cuts must be made in public spending, indicating a return to a period of austerity, and that "tough decisions" would be required to address the "eye-watering size" of the "fiscal black hole" left by former prime minister Liz Truss' disastrous mini-Budget.

In their meeting this week, the Treasury said the prime minister and chancellor had "reiterated their commitment to continuing to protect the most vulnerable during what will be a difficult period".

The independent think tank Resolution Foundation suggested that the government now faces a series of "unpalatable choices".

Despite this, Sunak's financial policies are being well received among voters with Conservative ratings up in the latest Opinium poll, reported The Observer newspaper.