Rachel Reeves is looking at more than a hundred tax and spending measures as she desperately tries to balance the books at the Budget.
The Chancellor is considering a blizzard of measures targeting the ‘wealthy’ as she scrambles to drum up huge sums.
Treasury officials are said to have been ordered to find ways of getting more money out of everyone with incomes of more than £45,000 a year.
Insiders claim that only Brits below that threshold – the bottom two-thirds of earners – are being defined as ‘working people’ to receive protection from Labour‘s tax assault.
That effectively brands the top third of earners as ‘wealthy’ – encompassing jobs such as HGV drivers, teachers and head chefs at the Wagamama restaurant chain.
However, there are reports today that horse racing could be spared from expected taxes on gambling. Instead the focus is likely to be on slot machines and online gaming.
Chancellor Rachel Reeves is considering a blizzard of measures targeting the ‘wealthy’ as she scrambles to drum up huge sums
Ms Reeves is facing an increasingly desperate situation in her fiscal package on November 26.
The Treasury’s OBR watchdog is believed to have downgraded productivity forecasts by 0.3 percentage points – adding an estimated £21billion to the black hole in the public finances.
Sluggish economic growth, rising debt costs and humiliating U-turns on efforts to curb the benefits bill could add a further £20billion to the gap Ms Reeves has to fill.
With seemingly no scope for trimming spending, fears are running high that the Chancellor will rely entirely on raising taxes.
Sources have confirmed that bigger property taxes are on the radar, while Keir Starmer has refused to rule out smashing the Labour manifesto by increasing income tax, national insurance or VAT.
The Chancellor is said to be looking at dramatically hiking council tax for the top bands, which could affect over a million families.
That could mean an eye-watering rise from £3,800 to £7,600 for residents of a band G household in England – and from £4,560 a year to £9,120 for those in band H.
The move would hammer London and the South East, where property prices are higher. Critics warned it would spark a crisis for pensioners on fixed incomes and families who have stretched themselves to afford a dream home.
Ms Reeves has already delivered the biggest tax-raising Budget on record last year, soaking Brits for £41billion.
Economists have warned this package might be on the same scale, and could have devastating impacts on growth.
Even a far smaller raid would leave Ms Reeves having announced bigger tax hikes in 16 months than Gordon Brown did over a decade.
Capital gains, pension reliefs, inheritance tax and partnership structures have also been listed among the ways Labour could seek to raise funds.
Final decisions are unlikely to be made for another week or so, when the OBR will start factoring the government’s plans into its draft forecasts.
More than a million homes could see their council tax doubled if Ms Reeves goes ahead with the idea of hiking top bands
The move would hammer London and the South East, where property prices are higher
One government source told the Times more than 100 tax and spending measures are still on the table – including an income tax increase.
‘Nothing is decided and can’t be decided until we know exactly what the forecasts are,’ the source said.
Sir Keir has previously mooted a bewildering array of definitions for a ‘working person’ since his election pledge not to increase taxes on them.
At one point he said that it referred to someone who ‘goes out and earns a living’ and can’t ‘write a cheque to get them out of difficulty’.
However, the idea they can be identified by salary opens the prospect that rises in income tax or National Insurance in the Budget on November 26 could make people on £46,000 worse off.
