Brace yourself for Rachel Reeves's most cynical tax raid yet

Yahoo

a day ago

Cast your mind back to little over a year ago when Sir Keir Starmer and Rachel Reeves came into power and suddenly became very sombre about the state of the nation's finances.
Starmer warned that 'things are worse than we ever imagined', and said that the October Budget would be 'painful'.
Despite a £40bn tax raid in the Chancellor's maiden Budget, things are still, it appears, just as bleak. Reeves's economic blunders have helped create a funding void that economists warn could require a £30bn tax raid to fill.
But still, Labour has doubled down on its naive manifesto pledge not to raise income tax, National Insurance or VAT. So if the Chancellor won't tax 'workers', who will she go after?
I'm afraid it's bad news for pensioners and anyone who might be perceived as wealthy.
Labour has now reluctantly announced a partial U-turn on its foolish decision to take the winter fuel allowance from 10 million pensioners in an effort to save £1.5bn a year.
The Treasury is now reportedly drawing up plans to hand back the payments to lower-income pensioners.
I suspect Labour will use the return of the winter fuel payment to justify a tax raid on wealth and retirement income. You want the return of the winter fuel allowance? Well, you'll have to pay for it.
Bound by its election pledge, Labour will not be asking workers to pay for it. Instead, what we can expect are more backdoor tax grabs and insidious stealth rises. These will be, for all intents and purposes, tax rises that ultimately hurt households.
Angela Rayner's demands to force more of us to pay the 45p in the pound rate of income tax and to reinstate the pension lifetime allowance can surely not be off the table.
The Tory deep freeze on tax rates across the board will almost certainly be extended, dragging more workers and pensioners into higher tax brackets that consume more of their wealth.
Aspiration and prudence will ultimately be the victims of this relentless tax drive that now means hard work no longer pays.
The Government has already shown that it holds ideology above reason. Its capital gains tax raid will blow a £23bn hole in the public purse. Its inheritance tax assault on farmers risks a food crisis and will also cost the Treasury £2bn. Its vindictive attack on private schools is already proving to be a bad idea, and its talk of taxing the wealthy has triggered an exodus of millionaires whose taxes we desperately need.
Fresh tax rises are only inevitable because of Labour's mismanagement of the economy. It has splurged on the wasteful public sector and punished the productive private sector. Now it is throwing billions at the North because it is scared of Reform UK.
We can only hope that the Government has learnt lessons from its early months in power and will start to undo the damage. The winter fuel U-turn suggests so, but its blind stubbornness over farmers and blinkered tax pursuit of hard-earned wealth suggests otherwise.
If the economy does improve, Labour needs to rescind its tax grabs and incentivise money-making and growth.
It's patently obvious that you cannot tax your way to prosperity. Britain can hardly afford to have a Chancellor who is learning on the job.
Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.