Tax levels at their highest since WW2 recovery

The Office for Budget Responsibility has released their analysis of the Treasury’s budget plans, announced by Chancellor Rishi Sunak this afternoon.

Their figures show that the tax burden is scheduled to soar from 33.5% of GDP recorded prior to the pandemic in 2019-20 to 36.2%by 2026-27.

It said this is the highest level of tax since towards the end of Clement Attlee’s Labour administration in the early 1950s, after the UK continued to reel from the effects of the Second World War.

It also said that while “A rebounding economy” will mean that the Chancellor will meet “his new fiscal mandate to get underlying debt falling three years from now, but only by a small margin.”

It added that while public spending “falls back sharply from its peacetime high of 53.1% of GDP in 2020-21 to 45.1% this year and to 42.1% next year as pandemic-related support comes to end,” it is set to stabilise “at 41.6% of GDP from 2024-25 onwards, 0.9% of GDP higher than in our March 2020 forecast, and the highest sustained level since the late 1970s.”