Rachel Reeves will need to raise taxes in this month’s budget by about £25 billion to honour Labour’s pledge not to return Britain to austerity.
The chancellor must raise taxes by twice as much as George Osborne’s austerity budget in 2010 to ensure that public spending can rise across the board, even with looser fiscal rules, the Institute for Fiscal Studies (IFS) estimates.
Reeves is considering increasing employer national insurance contributions. Sir Keir Starmer refused to rule it out on Wednesday and Labour sources insisted the levy on bosses was not covered by its manifesto pledge that the government “will not increase national insurance”.
Reeves is seeking ways to raise billions of pounds while sticking to a promise not to raise taxes on “working