Archbishop of Canterbury: Ministers should have ‘courage’ to raise taxes and increase borrowing
2 min read
The Archbishop of Canterbury has urged the Government to boost public spending by raising taxes and increasing borrowing.
Justin Welby said ministers had lost their “nerve” over borrowing and suggested that record low interest rates should be seized on to increase funding for public services like the NHS.
Speaking at a private event at the Institute of Directors in central London last week, he said: “We seem to have also lost our nerve about the importance of National Insurance as a way of funding the welfare system, particularly the health system.”
Asked whether he would support higher taxes he said: “The evidence for that is reasonably strong electorally but we just need politicians with more courage.”
Archbishop Welby added: “In terms of simple public borrowing we’ve got ourselves into this debt panic that if we borrow money it is somehow a disaster.
"With long term interest rates at or below a reasonable expectation of the rate of growth in the economy, there is little reason to be so afraid.
"We are borrowing, as George Osborne famously said five or six years ago, at the lowest rate that the British government has ever borrowed at since the Norman conquest.
"So it is possible to invest for the long term with the reasonable expectation that the economy will grow faster than the level of debt.”
However, former Tory Cabinet minister John Redwood dismissed the Archbishop’s remarks, saying: “Increasing tax rates could end up with collecting less revenues than if you keep them at a competitive level.”
Director General at the Institute of Economic Affairs Mark Littlewood also spoke out against the ideas, claiming that increasing taxes to fund the NHS “would not be courageous, but irresponsible”.
He said: “If they want to be brave, politicians must stand up to these ever-louder siren calls for raising taxes and higher borrowing as the solution to everything – for the sake of those who will end up having to pay for it.”
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