Doubts grow on Hunt's room for tax cuts as IFS sounds warning

BRITAIN faces a "nasty combination" of high tax and tight public spending after the next general election, leading economists warned today as doubts grew over Jeremy Hunt's room for Budget giveaways.

- Nicholas Cecil

The grim warning from the Institute for Fiscal Studies came as the Chancellor, pictured, and his Labour counterpart, Rachel Reeves, clashed over tax cuts as they both sought to sharpen general election battlelines.

The Government dangled the prospect of more tax cuts ahead this year if the fight to force down inflation towards two per cent can be won.

But Labour accused ministers of increasing overall bills due to "stealth taxes" dragging millions more people into paying the higher rate of tax or into paying the basic rate.