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Thinktank suggests seven pence rise in income tax

The National Institute of Economic and Social Research has reviewed the finances of the UK government and made some rather startling suggestions which will not make good reading for the UK taxpayer. The institute believes that either income tax in the UK should increase by seven pence in the pound or the pension age should be increased to 70 years in order to plug the massive gap in the UK government's finances.

The report goes on to suggest that all major political parties are refusing to acknowledge the severity of the situation which will see UK taxpayers in debt for up to a generation. There are concerns that the likes of the Labour Party, Conservative party and the Liberal Democrats are currently more interested in currying public favour rather than attacking the major issues head-on.

Even when you strip out UK government's debt which has been added because of the recession, remaining debt is still 6% of GDP which is a figure that is unsustainable in the short, medium or long term. Other suggestions from the Institute included a public pay freeze for five years, a reduction in the public sector workforce of 120,000 and VAT on items which are currently exempt. If this does not reflect the severity of the UK government's finances then nothing will!

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