The article argues that Chancellor Rachel Reeves will need to raise taxes in the upcoming spending review to fund increased spending pledges on defence, NHS, police, housing, and net zero, despite Labour's manifesto commitments. This is due to weak growth, high borrowing, and self-imposed fiscal rules. Creative tax-raising options like a financial transactions tax or limiting pension tax relief are suggested, as traditional methods like VAT or income tax hikes are politically unfeasible.
Rachel Reeves can’t avoid raising taxes any longer – but she’ll need to get creative
EconomicsRachel ReevesTaxTax and spendingLabourMoneyPoliticsUK
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TL;DR: Key points with love ❤️The article argues that Chancellor Rachel Reeves will need to raise taxes in the upcoming spending review to fund increased spending pledges on defence, NHS, police, housing, and net zero, despite Labour's manifesto commitments. This is due to weak growth, high borrowing, and self-imposed fiscal rules. Creative tax-raising options like a financial transactions tax or limiting pension tax relief are suggested, as traditional methods like VAT or income tax hikes are politically unfeasible.
Trending- 1 Last month: Partial U-turn on means testing of pensioners’ winter fuel allowance
- 2 Next week: Rachel Reeves to deliver spending review
- Potential tax increases for UK citizens
- Impact on public services funding
- Ongoing debate about fiscal policy and economic growth
What: Chancellor Rachel Reeves faces the necessity of raising taxes in the upcoming spending review to fund increased public spending pledges, given weak growth and high borrowing.
When: Next week (spending review), last month (partial U-turn on winter fuel allowance), 2008-09 (global financial crisis), 14 years (Conservative rule).
Where: UK.
Why: To fund increased spending on defence, NHS, police, housing, and net zero targets while adhering to fiscal rules amidst weak economic growth and high borrowing.
How: Reeves will need to identify new revenue streams, potentially through creative tax measures, as traditional tax hikes are politically difficult.