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Analysis

Britain, like Australia, has tough calls to make on tax

The Tories need tax cuts to revive their election prospects this year. But tax cuts might be unaffordable, and could keep interest rates higher for longer.

Hans van Leeuwen
Hans van LeeuwenEurope correspondent

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London | Australia isn’t the only country in the grip of a tax debate. In Britain, angst about the tax burden has been bubbling away ever since Liz Truss’ premiership failed to outlast the shelf-life of a lettuce in late 2022.

The governing Conservatives have a natural ideological bent towards cutting taxes. But after almost 14 years in power and lots of bracket creep, they have overseen an increase in taxation’s share of GDP that is nudging towards 37 per cent – the highest since World War II.

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Hans van Leeuwen covers British and European politics, economics and business from London. He has worked as a reporter, editor and policy adviser in Sydney, Canberra, Hanoi and London. Connect with Hans on Twitter. Email Hans at hans.vanleeuwen@afr.com

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