Britain will need much higher taxes on the average person to fund more government spending, according to a former Bank of England governor.

Lord King of Lothbury said “the rich don’t have enough money to pay them back” when it comes to meeting the “strong case” for extra spending in certain areas to help recover from the lockdown.

He added that politicians also need to “come up” and explain the consequences of the sharp rise in inflation, the decline in living standards, caused by the opposition to the Russian invasion of Ukraineas well as helping future generations cope with increasing national debt.

When asked if it would be similar to the recent era of austerity ushered in by the former Conservative chancellor George OsborneLord King replied: “In some ways it may be more difficult.”

A big challenge, I believe the best way to improve national savings is to reduce the government budget deficit and that is a major challenge for both parties

He added on BBC One’s Laura Kuensberg on Sunday: “I think everyone can see that there is a strong case for increased public spending in certain areas as we recover from the lockdown period, and in many ways people are very good at identifying areas where public spending should be higher in the long run.

“The problem is that if we want European levels of social benefits and public spending, you can’t finance it with American levels of tax rates.

“So we may need to face the need for much higher taxes on the common man.

“The rich don’t have enough money to pay it back.”

Lord King previously outlined the challenge for the next prime minister and the opposition to confront high inflation, the scale of the national debt and the country’s need to save more.

He said: “The big challenge, I think the best way to improve national savings is to reduce the size of the government budget deficit, and that’s a major challenge for both parties.”

Lord King pointed out that government spending is not falling and is likely to increase, adding: “Tax therefore has to rise to fill the gap that currently exists.

“It’s not a very happy picture for the next few years, but we need a government that will honestly tell us that our national standard of living is going down because we decided to help Ukraine and stand up to Russia, and that means we’re all going to have to share the burden – we can’t just put it on our children and grandchildren.”

Lord King said mortgage rates were “obviously going to rise”, but noted that this was happening elsewhere in the world.

He added that all central banks “made a mistake” during the lockdown period, “thinking they had to print a lot of money to support the economy”.

Lord King continued: “While the economy is actually shrinking under lockdown, it was the wrong policy and all the central banks – not just ours, but the Federal Reserve, the European Central Bank – are now facing very high inflation rates of close to 10 %.

“We’re all in the same boat.”

In a message to policymakers, Lord King said: “It is time to step forward, create a narrative that explains to people the consequences of: a) allowing inflation to run high; b) opposing Russia and supporting Ukraine, which has lowered our national standard of living; and c) the need to help future generations cope with the increasing national debt we are leaving them with.’

Labor leader Sir Keir Starmerspeaking on the same program after Lord King’s remarks, said the next government would have to “deal with the real mess in our Tory-created economy”.

Asked to elaborate on the Labor government’s policy areas, he noted that they will face “tough choices” that mean they “can’t do some of the things we want to do as a new Labor government as quickly as we would like to”.

Asked what that would include, Sir Keir said: “I’m not going to write our manifesto on that agenda.”