Britons can expect no cut in the overall tax burden for an extended period as the coalition government takes tough steps to narrow a gaping budget deficit, a Treasury minister was quoted as saying on Sunday.
I think the tax burden is necessary as a significant contribution to getting the country's finances in order, Chief Secretary to the Treasury Danny Alexander told the Observer newspaper.
So it will have to stay at that level for quite some time, said Alexander, Chancellor George Osborne's deputy.
The Observer said Alexander's comments appeared to dash hopes of tax cuts for the middle classes until 2015 at the earliest.
Alexander, a centre-left Liberal Democrat, has a key role in drawing up the coalition's detailed plans to cut a record peacetime budget deficit of 11 percent of Gross Domestic Product to almost nothing in five years.
The LibDems are the junior partner in the coalition government formed with the centre-right Conservatives after the May election. The coalition produced the harshest budget in a generation in June, slashing spending and raising sales tax.
The Observer said Alexander's comments would alarm Conservative legislators hoping for tax cuts before the next election expected in 2015.
The plan we set out is a plan to rebalance the tax system. We need the tax revenues from the taxes we are putting up in order to help us reduce the deficit, Alexander said.
But we also want to rebalance the tax system so that particularly people on lower incomes keep more of what they earn ..., he said.
In due course (we will be) looking at other ways to rebalance, looking at green taxes, he said.
A respected think-tank, the Institute for Fiscal Studies, said this week the June budget would hit the poor hardest, contradicting the government.
The IFS's conclusion was particularly damaging for the LibDems, who are having a tough time selling the budget to their supporters, and could make it harder to build public support for planned spending cuts of 25 to 40 percent set to be detailed in October.
The Observer said a new star chamber, set up to scrutinise department budgets, would meet next week for the first time since ministries submitted plans for deep cuts.
(Reporting by Adrian Croft)