Rachel Reeves is set to batter ordinary workers and the South East at the Budget – as she pumps up benefits by £15billion a year.
The Chancellor is putting the final touches to another grim package, despite promising just a year ago that she would not be back for more taxes.
Ms Reeves is expected to order a council tax revaluation of Band F, G and H properties on Wednesday, potentially punishing residents where properties have risen sharply.
Homes worth over £2million – mostly in London – face an extra ‘mansion tax’ levy as the government bows to Labour demands to milk the ‘wealthy’.
Meanwhile, Treasury sources have been all-but confirming that the hated freeze on tax thresholds will be kept in place for another two years.
That ‘stealth raid’ will raise billions of pounds by dragging millions of people deeper into the tax system.
Rachel Reeves is set to batter ordinary workers and the South East at the Budget – as she pumps up benefits by £15billion a year
For the first time, the state pension would be above the tax threshold – so the government will give with one hand and take with the other.
Ms Reeves is also targeting the ‘salary-sacrifice’ schemes used by millions of private-sector workers for their pensions, bringing in around £3billion.
The move echoes Gordon Brown’s infamous pensions raid during the last Labour government. Experts warned it would deal a hammer blow to private-sector pensions, which already lag far behind the gold-plated arrangements for those in the public sector.
Ms Reeves is struggling to fill a black hole in the books thought to run into tens of billions of pounds.
She has blamed everything from OBR watchdog productivity downgrades to Brexit and Donald Trump for her woes.
But businesses have accused Labour of crushing growth with the last brutal Budget raid – the biggest tax-raiser on record.
And critics point out that Ms Reeves is also splurging huge sums on handouts.
She is expected to scrap the two-child benefit cap at a cost of around £3billion a year, and uprate handouts by nearly 4 per cent from April.
The IFS think-tank has previously suggested a council tax revaluation would hit London and the South East hardest
Ms Reeves has already abandoned hope of curbing the spiralling benefits bill after a Labour revolt earlier this year. She must also fund the cost of another climbdown on winter fuel allowance cuts.
Together those policies are estimated to add around £15billion a year to the benefits bill.
Just a year ago Ms Reeves told the CBI conference that she would not be increasing taxes again after that.
Touring broadcast studios this morning, Business Secretary Peter Kyle apologised for the rumours swirling around the contents of the Budget.
Alarm has been raised that the chaotic run-up – including an extraordinary U-turn on whether income tax will rise – has smashed confidence and slowed the economy.
He told Times Radio: ‘I’m not apologising on behalf of the people who are reporting on the speculation, because that would be absurd.
‘What I can apologise for is the fact that there has been so much speculation. I understand that it’s a distraction, but it is speculation and the reporting of such.
‘I’m here to talk about the facts of the economy right now. And the facts are that we are delivering schemes that are lowering the cost of energy for business in this country, we are delivering an industrial strategy, delivering stability in policymaking for 10 years into the future.
‘We have got a grip on the interest rates and the inflation challenges.’
