Raise income tax by 6p in the pound, UK told

Britain should raise income taxes by 6p in the pound to make bigger inroads into its huge deficit or risk being vulnerable to the next financial crisis, according to a leading thinktank that advises the Treasury.

Current plans by the political parties to reduce spending and pay down debt would not be enough to prepare the country for a collapse like that of Lehman Brothers and a deep recession, said the National Institute of Economic and Social Research (NIESR).

The hard-hitting criticism of plans by all political parties to cut the deficit, and especially the reliance on "mythical" efficiency savings, came as Europe was convulsed for a second day by the aftershocks of Standard & Poor's decision to downgrade Spanish government debt. more...