{"text":[[{"start":9.55,"text":"Increasing VAT would be the UK government’s best option to raise revenue fast if the public finances veered off course, the OECD said on Wednesday. "}],[{"start":20.25,"text":"In a new report on the UK economy, the Paris-based organisation gave a stark assessment of the fiscal challenges awaiting Andy Burnham when he becomes prime minister next week. "}],[{"start":31,"text":"Under Sir Keir Starmer, the government has raised almost £70bn in tax to fund higher spending on the NHS and public investment. "}],[{"start":40.25,"text":"Despite a manifesto pledge not to raise any of the three biggest taxes, it had in effect already raised income tax by stealth, the OECD noted, adding that any new increase in national insurance would hurt the jobs market. "}],[{"start":54.15,"text":"This meant that if a tax increase became “a last-resort necessity”, raising VAT would be the “most prudent” way to limit the damage to the economy, it said in its report. "}],[{"start":65.9,"text":"The UK’s current fiscal stance was “adequate”, the OECD said, but ministers’ strategy is risky because it hinges on new spending boosting growth enough to offset the adverse impact of new taxes. It also depends on spending restraint in the run-up to the next election. "}],[{"start":81.60000000000001,"text":"“If economic conditions weaken or political pressures intensify, future spending restraint may prove difficult to implement,” the OECD said, underlining the need for contingency plans “to help ensure that fiscal consolidation remains on track”. "}],[{"start":96.50000000000001,"text":"Other short-term fixes could include a temporary windfall tax on energy companies, or a temporary suspension of indexation of the state pension, it said."}],[{"start":106.25000000000001,"text":"Over time, however, the UK would need to tackle politically sensitive tax and spending reforms to prevent public debt climbing to 200 per cent of GDP by 2050, the OECD warned. "}],[{"start":118.65000000000002,"text":"The public finances would not be sustainable in the longer term without this comprehensive reform, it said, echoing a similar assessment last week by the Office for Budget Responsibility, the UK fiscal watchdog. "}],[{"start":130.65000000000003,"text":"Reforms should centre on containing the rise in welfare and public services spending, however, because the tax burden was already high and further increases “could weigh on economic activity”, the OECD said. "}],[{"start":143.50000000000003,"text":"The OECD set out alternatives to the UK’s “triple lock” on the state pension, suggesting that in future it should rise in line with the average of earnings and inflation — rather than the current guarantee it will match the highest out of inflation, wage growth or 2.5 per cent. "}],[{"start":160.65000000000003,"text":"It also noted that spending in UK hospitals was high by international standards while their productivity remained below pre-pandemic levels. "}],[{"start":169.95000000000005,"text":"Tax reforms, rather than increasing headline rates, should be focused on measures to broaden the coverage of VAT, tackle non-compliance among small businesses and scrap inefficient subsidies for research and development, the report argued. "}],[{"start":183.50000000000006,"text":"The OECD also gave its backing to some of Burnham’s favoured policies — including wide-ranging reforms of property taxation and greater devolution to help close regional productivity gaps."}],[{"start":195.55000000000007,"text":"Its intervention came as a breakdown of the ceasefire between the US and Iran led to a renewed rally in global oil prices and fresh volatility in UK gilts, which have proved more sensitive to geopolitical tensions than other sovereign debt instruments. "}],[{"start":211.75000000000006,"text":"Burnham, who will become Labour leader on Friday, has pledged to stick to the existing fiscal rules as he explores combining this autumn’s Budget with a departmental spending review to set his priorities up to the next election. "}],[{"start":234.15000000000003,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1784113491_4726.mp3"}