Spain’s cash-strapped Socialist government is poised to emulate the UK and increase taxes on the rich, reversing its policy of tax cuts and prompting protests from the conservative opposition.

The impending U-turn – designed to plug the gaping budget deficit arising from the global economic crisis – was signalled this week by José Blanco, public works minister. “If we need to raise certain tax rates in order to guarantee social policies or public investment, then we’ll have to do it,” he said in a radio ­interview.