Report: Starmer and Reeves 'lay the ground for massive tax hikes'
Sir Keir pointedly refused to rule out tax increases earlier this week, while the Bank of England has voiced concern about persistent inflationary pressure - which puts more pressure on the finances. However, ministers have been adamant that they will stick to the manifesto promise not to target the main rates of income tax, national insurance or VAT .
The tax burden is already set to hit a new high as a proportion of GDP after the last Budget imposed a £41billion increase - the biggest on record for a single package. One insider told the Guardian that the government wanted there to be 'no surprises' for markets in the Autumn.
'Last year was a model of how to do it,' the adviser said. 'Had we done it otherwise, it would have been a mess.' The National Institute of Economic and Social Research (NIESR) said earlier this week that Ms Reeves could have to find the equivalent of adding 5p to income tax to keep afloat by the end of the decade and meet her fiscal rules.
To fill the hole and maintain the buffer, the Chancellor will have to find £51billion annually in higher taxes or lower spending by 2029/30.
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