"I think it would have been better to have said in the budget, 'look, the previous government was irresponsible in cutting employees' national insurance contributions, but let's be frank, we were pretty irresponsible in saying we wouldn't reverse it'," Lord King said.
Lord King said increasing taxes would be needed in order to accommodate both a rise in defence spending and public services reform, adding: "The obvious tax to raise is the basic rate of income tax, we will all contribute to it.".
Lord Mervyn King told Sophy Ridge's Politics Hub programme we should all recognise "the very difficult position" that Chancellor Rachel Reeves has "inherited", as he pointed to slow growth, a high budget deficit, large national debt and interest rates rising.
But he suggested rather than employers' national insurance contributions, employees' income tax is what should have been hiked when Ms Reeves announced her budget in October.
Lord King nonetheless thinks it is still possible for the government to say to people "maybe we said some silly things before the election" but "this is the situation Britain finds itself in, this is what we have to do over the next four to five years".
