all public spending line by line<\/a> has uncovered billions of pounds in efficiency savings, The i Paper understands.<\/p>\nBut economists say that Reeves will nonetheless have to come back in the autumn Budget with additional tax rises to meet demands from Labour MPs and trade unions for more spending on services.<\/p>\n
Her allies insist that she will instead grow the economy to free up extra cash, rather than relying on higher taxes.<\/p>\n
Union campaign for wealth taxes<\/p>\n
In the coming days, unions are understood to be launching a coordinated campaign for wealth taxes to raise money from the richest, with capital gains tax and levies on better-off pensioners among the options.<\/p>\n
Sharon Graham of Unite said that the Chancellor needed to fully reverse the cut to winter fuel payment funded by a tax on wealth, adding: \u201cThe Government needs to learn that when you are in a hole, you should stop digging.\u201d<\/p>\n
The Chancellor is also coming under increased pressure from Labour MPs who would like her to raise direct taxation.<\/p>\n
One Labour MP said: \u201cI would like us to look at tax. When the public realm is in such a dire state, I am not sure having the lowest corporation tax in the G7 is the right priority.<\/p>\n
\u201cI think there\u2019s an automatic assumption that you say anything about raising taxes that people run away. <\/p>\n
\u201cI have had time and again people say to me: \u2018We are fairly happy with paying more, why don\u2019t you just ask us to pay some more income tax?\u2019 I think it really insults the electorate to think that they can\u2019t deal with that argument.\u201d<\/p>\n
Another added: \u201cWe know that austerity doesn\u2019t work so if we are looking at more efficiency savings then I am not sure we will deliver anything better. I want to see her signal \u2013 ahead of the Budget \u2013 that she will be looking at things like tweaking fiscal rules and taxation.\u201d<\/p>\n
The Chancellor is sticking with a promise not to raise income tax, VAT or national insurance but refused to rule out other tax hikes at a CBI dinner on Thursday.<\/p>\n
It has been widely suggested that options on the table include raising capital gains tax, reducing the lifetime allowance threshold on pension pots, and restricting other forms of tax relief for pension savers.<\/p>\n
The Chancellor could also maintain the freeze on income tax thresholds, which has the \u201cfiscal drag\u201d effect of pulling more people into higher rates of taxation as wages rise.<\/p>\n
It also raises the prospect of pensioners having to pay income tax as pensions rise.<\/p>\n
Call to reverse Jeremy Hunt\u2019s national insurance cut<\/p>\n
A leading economist who has been advising Labour said the Chancellor should consider reversing cuts to national insurance which were announced by Jeremy Hunt when the Conservatives were in power \u2013 rather than blaming her predecessor for leaving a \u00a322bn \u201cblack hole\u201d.<\/p>\n
The source said: \u201cIt\u2019s not the \u00a322bn that\u2019s been their problem, it\u2019s the unfunded tax cuts that the Tories introduced before the election that Labour supported.\u201d<\/p>\n
James Smith of multinational bank ING said Reeves was \u201clikely to be in the red in the autumn\u201d thanks to shifting economic conditions and pressure to spend more on defence and benefits, with a possible shortfall of \u00a320bn. <\/p>\n
\u201cThe easiest way to raise the money would be to extend the existing freeze on income tax thresholds, dragging more people into paying higher rates of tax, and increasing employers\u2019 national insurance contributions again.\u201d<\/p>\n
Speaking to the Confederation of British Industry this week, the Chancellor refused to rule out raising taxes \u2013 saying: \u201cI\u2019m not going to say that I\u2019m not going to take any tax measures in the next four years.\u201d But she insisted the next Budget would not be a repeat of the last one.<\/p>\n
The spending review is expected to include promises of more transport investment in the North of England, although some of the details will be held back until the publication of a \u201c10-year infrastructure strategy\u201d the following week.<\/p>\n
A Treasury spokesman said: \u201cThe best way to strengthen public finances is by growing the economy. That is our focus and the key priority in our plan for change.<\/p>\n
\u201cChanges to tax and spend policy are not the only ways of doing this, as seen with our planning reforms which are expected to grow the economy by \u00a36.8bn and cut borrowing by \u00a33.4bn.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"The spending review on Wednesday is set to include \u00a3100bn in extra infrastructure spending but cuts to most…\n","protected":false},"author":2,"featured_media":166718,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,8414,2499,619,66727,16,15],"class_list":{"0":"post-166717","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-labour","11":"tag-personal-finance","12":"tag-rachel-reeves","13":"tag-spending-review","14":"tag-uk","15":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114645876237165238","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/166717","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=166717"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/166717\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/166718"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=166717"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=166717"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=166717"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}