Why Labour should avoid Gordon Brown's stealth taxes

During the election campaign, Chancellor Rachel Reeves made bold promises – no increases to Income Tax, National Insurance, or VAT. She also sought to echo the ‘prudence’ mantra of her predecessor as chancellor Gordon Brown, though his tenure was marked by significant spending increases rather than prudent restraint.

True to form, over the weekend Reeves indicated the government could accept recommendations for above-inflation pay increases, of about 5.5 per cent, for NHS workers and teachers. The Institute for Fiscal Studies (IFS) estimates that a similar pay hike across public sector professions would cost about £10 billion, requiring more taxation or borrowing. This comes amid other ambitious plans for restructuring and investment, which will all cost even more money.

Stealth taxes, such as failing to adjust income tax thresholds for inflation or tweaking capital and inheritance taxes, are Reeves’s most likely choice

But the public finances are in a precarious state. The tax burden is the highest it has been in seventy years.