Tax rises likely, M&S chief says

05/11/2009

Taxes are likely to rise because Britain is "skint", one of the nation's top businessmen has said.

Sir Stuart Rose, executive chairman of Marks & Spencer, said that big government deficits would mean that VAT might rise higher than 17.5 per cent in the future, the Daily Telegraph reported.

The recession has resulted in the government, as well as many consumers, suffering from major debt problems.

Tax revenues from businesses and workers alike have fallen due to the economic downturn, meaning that the public balance sheet has gone further into the red.

Current official predictions show that net national debt will grow by £175 billion or more during 2009.

The government can improve its financial position in future by raising taxes or cutting public spending.

However, an increased tax burden can lead to increased personal income worries for the general public.

Sir Stuart was quoted by the newspaper as saying: "We are skint as a country and the Treasury needs revenue so I would not rule [tax increases] out.

"It might be 2011 before we start seeing some growth."

Kevin Still, EuroDebt director, added: "VAT and personal taxation increases will be another hammer blow to many indebted people, who have seen essential household costs continue to rise and disposable income seriously squeezed. With many credit card issuers also increasing their interest rates and reducing access to further credit this has moved many from a position of just about coping to being in an unmanageable position with regard to their personal finances.

"EuroDebt meet many prospective clients face-to-face who have serious money worries and who are struggling to budget effectively. Dealing with your creditors can be quite daunting if you have multiple credit cards and loans. EuroDebt's average client has over £29,000 of unsecured debt compared to a national average of just over £21,000 for people using credit. The average number of credit agreements is eight and this makes self-management complex."

Tags; Income Worries and Debt, Recent Graduate Debt, Young Family Finances, Credit Card Lifestyle,

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