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Tax cuts in the Budget next month? The International Monetary Fund thinks this would be a bad idea, and that has caught the headlines. Jeremy Hunt wants to cut them, but he has apparently warned the Cabinet that there won’t be as much room as there was last year, so will lower taxes remain an aspiration rather than a reality?

Well, for a start let’s get one thing clear. These aren’t real cuts, just as the reduction in national insurance Contributions that has just come in was merely reversing previous increases. The overall tax take as a percentage of the country’s GDP will be the highest since the early 50s. Even if taxes are trimmed a bit, they will still be higher than any stage since the early 80s – so higher than most people in jobs now will have experienced in their working lives.

Yet, as the IMF points out, more money is needed for public services and investment in infrastructure. And while the IMF has not covered itself with glory in recent years in its commentary on the UK – its growth forecasts have proved too pessimistic on several occasions – its concerns have been echoed here by the independent Institute for Fiscal Studies. The IFS argues that whoever forms the next government, it will have to face some difficult trade-offs between reducing the debt-to-GDP ratio, maintaining public spending and holding down taxes.

It is a dismal litany, but to put all this in context, the UK’s debt-to-GDP ratio is similar, and in several cases lower, than that of other major developed countries. Only Germany has a much lower national debt. Taxation as a share of GDP is lower than the OECD average, though higher than other English-speaking countries such as the US, Australia, New Zealand and Ireland. And relative to the........

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