Rachel Reeves ‘could target pensioner and driver taxes’ in the Budget to raise more than £20 billion, think tank warns
Rachel Reeves could raise more than £20 billion in next month’s Budget by raising taxes on wealth, pensions, and drivers, according to an influential think tank.
In a new report today, the Resolution Foundation says tax rises in next month’s Budget are a ‘dead cert’ – and suggests the Chancellor could raise ‘tens of billions’, despite ruling out increases in income tax, National Insurance and VAT during the election.
The think tank, which has close links to Labour, also calls for rises in fuel duty – and suggests Labour should consider charging drivers an extra 6p a mile to use their cars as part of a new road pricing scheme.
Sir Keir Starmer has already paved the way for a tax-raising Budget next month, warning it will contain ‘painful’ decisions on both tax and welfare.
Adam Corlett, of the Resolution Foundation, said: ‘There is widespread speculation about what might be in the first Budget of the new Parliament, but overall tax rises are a dead cert and time-honoured tradition.
Rachel Reeves (pictured in July) could raise more than £20 billion in next month’s Budget by raising taxes on wealth, pensions, and drivers, according to an influential think tank
The think tank, which has close links to Labour, calls for rises in fuel duty – and suggests Labour should consider charging drivers an extra 6p a mile to use their cars as part of a new road pricing scheme (file image)
‘The Labour manifesto included £10 billion of tax rises, but fresh ones will be needed in order for Rachel Reeves to sufficiently fund public services and investment while still hitting her fiscal rules.
‘Long overdue reforms to Inheritance Tax, Capital Gains Tax and pension contribution reliefs would fit the bill and could raise over £20 billion if needed, while also making the tax system fairer and more consistent between different taxpayers.’
Today’s report suggests that ‘reforms’ to capital gains tax, which is levied on the sale of assets, could raise up to £12 billion a year.
Closing ‘loopholes’ in inheritance tax could raise a further £2 billion.
The study also suggests that the Chancellor should levy National Insurance on employers’ contributions to staff pensions, potentially generating another £9 billion a year.
It says these three tax raids would pass the ‘triple test’ of ‘improving tax efficiency, ensuring that tax rises fall on those with the broadest shoulders and not breaking manifesto commitments’.
Closing ‘loopholes’ in inheritance tax could raise a further £2 billion (file image)
The report also calls for an end to the temporary 5p cut in fuel duty, which costs the Treasury £2 billion a year, and says that annual increases in the motoring tax should be restarted for the first time in more than a decade.
In a recommendation that will alarm motorists, it also calls for ministers to start work on a comprehensive system of road pricing in order to recoup losses from the switch to electric vehicles.
It suggests road charges, starting at 6p per mile, could eventually replace the revenue lost from fuel duty as the switch to electric vehicles accelerates.
The report adds: ‘Delay will likely only make the choice more painful, as the number of electric vehicle drivers grows daily – and it is easier to raise taxes for future drivers than current ones.
‘Given the potential need for significant legislation, physical piloting and standards that need to be set for manufacturers in the case of some possible outcomes, there should now be a sense of urgency.’
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Businesses put hiring on hold over Labour’s endless doom-mongering: Damning report calls for ministers to offer ‘vision for positive, prosperous Britain’
Businesses have put hiring on hold as Labour faces accusations of economic doom-mongering ahead of the Budget.
In a further sign that confidence among employers is ebbing away following the election, a report shows firms are ‘holding back from hiring’ new staff.
It also called for ministers to present ‘a vision for a positive, prosperous Britain’ amid mounting fears Labour’s pessimism and plans for bumped up workers’ rights are harming the economy.
The report, published today by the Recruitment and Employment Confederation and KPMG, came as business leaders warned the prospect of a series of brutal tax hikes in the Budget next month was already pushing wealth creators out of the UK.
Fresh statistics from Henley & Partners, which helps wealthy investors move overseas, showed a net loss of 4,200 millionaires in the first five months of the year, with 5,300 expected to leave before January.
Businesses have put hiring on hold as Labour faces accusations of economic doom-mongering ahead of the Budget. Pictured: Chancellor of the Exchequer Rachel Reeves
The report, published today by the Recruitment and Employment Confederation and KPMG, came as business leaders warned the prospect of a series of brutal tax hikes in the Budget next month was already pushing wealth creators out of the UK. Pictured: The City of London skyline
Fresh statistics from Henley & Partners, which helps wealthy investors move overseas, showed a net loss of 4,200 millionaires in the first five months of the year, with 5,300 expected to leave before January. Pictured: Bank Station in the financial centre of London
Fears are mounting that Labour will hike National Insurance contributions paid by employers – a so-called jobs tax – as well as capital gains tax and inheritance tax. There is also talk of higher fuel duty and a raid on pension savings.
In comments that may add to the alarm among business leaders, the leader of Britain’s trade union movement will today hail Labour’s planned expansion of workers’ rights and say he is coming after ‘bad bosses’.
Trades Union Congress general secretary Paul Nowak will tell its annual conference in Brighton: ‘I want to put every anti-union, anti-worker boss on notice.
‘If you think you can get away with paying poverty wages, forcing people into work when they’re sick and firing and rehiring your staff – think again.’
Today’s report stated: ‘Recent Government warnings that the UK’s economy may weaken further before improving add to the overall sense of uncertainty, affecting recruitment plans.
‘Firms holding back from hiring led to a sharp contraction in the number of people placed into permanent roles in August’
Trades Union Congress general secretary Paul Nowak will tell its annual conference in Brighton: ‘I want to put every anti-union, anti-worker boss on notice’
Today’s report stated: ‘Recent Government warnings that the UK’s economy may weaken further before improving add to the overall sense of uncertainty, affecting recruitment plans (stock image)
Last night Shadow Business Secretary Kevin Hollinrake (pictured) told the Mail: ‘Rachel Reeves and Sir Keir Starmer seem to think that talking down Britain, hiking up taxes and bringing in a tidal wave of new business regulation will grow the economy’
An index tracking permanent placements fell to 44.6 in August, down from 47.7 in July.
A reading of less than 50 signals that hiring numbers have fallen.
The report also raised concerns about the government’s gloomy rhetoric.
‘The new government said growth was its main priority – but it needs to deliver now. A vision for a positive, prosperous Britain has to accompany the fiscal realism that is being served up right now,’ the report said.
Last night Shadow Business Secretary Kevin Hollinrake told the Mail: ‘Rachel Reeves and Sir Keir Starmer seem to think that talking down Britain, hiking up taxes and bringing in a tidal wave of new business regulation will grow the economy.
‘It comes as no surprise that businesses are heeding their gloomy warning, driving them away and putting at risk the growing and resilient economy they inherited.’
