heads up says "The Government must decide whether it is to
tolerate the high debt burden, hoping that interest rates stay low
for the foreseeable future, or to actively try to bring the debt burden
down. GDP growth might act to reduce the relative debt burden, but
it is likely that more will be needed. To make real inroads a combination
of tax rises and austerity are likely to be required, and austerity
may not look like an attractive option when the pandemic has exposed
weaknesses in public services that need to be fixed.
The widespread expectation is therefore that taxes will have to rise
to help pay down the debt and invest in areas of public services,
such as the NHS. Economically, the Chancellor also needs to spur GDP
growth and tackle the unemployment crisis caused by the pandemic.
Tax increases will help the deficit situation but tend to act as a
drag on unemployment and GDP growth. On the other hand, some believe
that tax cuts are the answer, spurring growth in both GDP and employment
to generate increased tax revenues and ease public debt. More