labour party

THE chancellor could raise tens of billions from tax reforms that don’t hit “working people”, leading economists have said.

Rachel Reeves is under pressure to fill an estimated £50billion black hole in the public finances ahead of November’s autumn statement. 

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Westminster is awash with rumours that Labour could extend the freeze on income tax thresholds.

However, critics say this would mean breaking Labour’s manifesto pledge not to increase taxes on “working people”.

But in a new report, the Institute for Fiscal Studies (IFS) urged the Chancellor to resist “half-baked” solutions like “simply hiking rates”. 

The IFS Green Budget Chapter report instead urges the chancellor to reform the “unfair” and “inefficient” tax system.

End capital gains tax relief on death

Reeves could scrap capital gains tax relief on death, the report said.

When you sell certain assets – like houses, land or other valuable items – you have to pay a tax on the profit you made on it.

However, there are some important exceptions.

For example, if someone dies and you inherit their asset, you don’t have to pay capital gains tax they would have paid.

But the IFS said Reeves should consider scrapping the relief, raising £2.3billion in 2029-30.

However, families could oppose the measure given Labour is already skimming more revenue off inherited wealth.

The inheritance tax threshold has been frozen at £325,000 since 2009.

And last year, Reeves announced she would extend the freeze until 2030.

Hit taxpayers with a ‘one-off’ wealth tax

Economists and politicians are often divided over whether a wealth tax would work.

Supporters argue that the UK’s richest 1% are wealthier than the bottom 70% – and that a wealth tax would reduce this inequality.

But critics say it would be an administrative nightmare and lead millionaires to leave the country, taking their businesses and tax revenues with them.

But if Labour does reach for wealth in the budget – it should opt for a “one-off” wealth tax, the IFS said.

The think tank argues this is a better option than a recurring wealth tax.

It would work by the government calculating how much people’s total assets are worth and taxing them over a certain threshold.

“An unexpected and credibly one-off assessment of existing wealth could in principle be an economically efficient way to raise revenue,” the IFS wrote.

However, a wealth tax that happened on a regular basis would have “serious drawbacks,” the think tank warned.

Valuing everyone’s wealth every year would be “extremely difficult,” it said.

Moreover, a regular tax could deter the highest tax payers from residing in the UK long-term, potentially hitting overall tax revenues.

But the IFS said that even a “one-off” levy could spell trouble if people don’t trust the government not to come back for more.

The report said: “The potential efficiency of such a tax could be
undermined, however, if announcing a one-off tax created expectations of, or uncertainty about, other future taxes.”

Double the council tax rates paid by highest value homes

A new council tax surcharge could raise up to £4.4billion.

Council tax is a local tax on residential properties in the UK, with homes assigned to Bands A to H based on their value.

Bands G and H generally include the highest value homes.

The IFS said doubling the council tax paid by these households could mean a £4.4billion boost.

However, critics already say the council tax system is “unfair and arbitrary”.

As reported by The Sun, families living in modest homes sometimes pay more than those in multi-million-pound mansions.

The root of the problem is simple – council tax bills are not based on what your home is worth today.

Instead, it’s based on its value way back in 1991, when homes were categorised into bands ranging from A to H. 

Decades of uneven house price growth mean this once-simple system is now riddled with inequalities.

Moreover, councils set their own tax rates – leading to a “postcode lottery”.

The average Band D council tax in England is £2,280, but councils set their own rates.

For example, in Wandsworth, people pay just £990, while in Nottingham, they pay £2,656.

This means that millions of homeowners pay much less compared to their property’s value than those in poorer areas, according to PropertyData.

Another potential problem is that the extra cash would go to local authorities rather than central government.

Local authorities use council tax to pay for local services like schools, bin collections and libraries.

So to make sure it reaps the benefits of the change, Downing Street could reduce the grants being paid to councils, the IFS said.

The UK government gives councils more than £69billion in funding – a 6.8% increase in cash terms compared to 2024-25.

But councils would likely still fight back against any funding downgrade – with sticky 3.8% inflation already eating into their grants.

Rejig inheritance tax

The IFS admits that changes to inheritance tax could ‘provoke’ strong reactions.

But its report said that the £9billion said annually is ‘modest’ – although high by historical standards.

Reforming death duties to abolish the additional £175,000 tax-free allowance could raise around £6billion, the economists wrote.

“One obvious option would be to increase the rate of inheritance tax from its current 40%,” the economists wrote.

They said an increase of just 1% would raise £0.3billion in 2029–30.

The government could also reduce the threshold at which the tax begins to be paid.

Currently, people can pass on up to £325,000 of wealth tax-free.

Then there’s an additional £175,000 tax-free allowance that can be used only when passing on a primary residence to a direct descendant.

Abolishing the second of these allowances, for example, could raise around £6billion in 2029–30, the IFS said.

Crack down on businesses underpaying their taxes

The think tank has urged Labour to tackle tax non-compliance.

Corporation tax, a tax on company profits, has become increasingly important to the Treasury’s coffers in recent years.

Over the course of the 2010s, revenue averaged 2.4% of national income, rising to 3.3% in 2025–26.

But corporation tax dodging meant 15.8% of liabilities went unpaid in 2023-24, up from just 8.8% in 2017-18.

Small businesses are mainly to blame, the IFS said, admitting that claiming the prize of missing corporation tax “would not be straightforward in practice”.

The think tank added: “More work is needed to understand why so many small companies are submitting incorrect tax returns.

“It is likely that tackling the gap would require targeted
compliance activities from HMRC, such as auditing small businesses.”

The IFS also said “more revenue could be raised from corporation tax”.

However, it did warn that, while a 1% increase would raise £4.1billion, there could be adverse consequences.

The authors wrote that investment in the UK could become “less attractive” and reduce future tax yields.

However, critics may argue that any tax hike hitting members of the public – even if targeting inheritance or council tax – will still feel like a broken promise.

What must the chancellor avoid doing?

The personal tax allowance has been frozen at £12,570 since April 2021.

Prime Minister Rishi Sunak announced the freeze would remain until April 2026 and Labour extended it until April 2028.

Extending the freeze on personal tax thresholds including national insurance contributions would raise around £10.4billion a year from 2029-30.

But IFS economists say Reeves must not do this – and instead lift the threshold amid rising inflation.

Extending the freeze would be a breach of Labour’s manifesto pledge not to increase taxes for “working people” which includes income tax, national insurance and VAT, the IFS said.

The report’s authors also said restricting income tax relief on pension contributions would raise large sums but should be avoided.

Currently, when you put money into a pension, the income tax you’ve already paid on that money is essentially returned via a government top-up.

The IFS said restricting relief would be “unfair” to penalise pensions again when pension income is already taxed.

The Chancellor should also resist the temptation to up stamp duties, the IFS said.

The think tank fears it would cause people to avoid selling their homes when they want to – hitting the jobs market and holding back growth.

“Changing rates and thresholds is all very well, but unless the Chancellor is willing to pursue genuine reform it will be taxpayers that shoulder the cost of her neglect,” the report, which forms a chapter in the IFS’s wider budget assessment for 2025, said.

Isaac Delestre, a senior research economist at the think tank and an author of the chapter, said Ms Reeves would have “fallen short” if she reaches for quick revenue without wider reform.

“Almost any package of tax rises is likely to weigh on growth, but by tackling some of the inefficiency and unfairness in our existing tax system, the Chancellor could limit the economic damage,” he said.

THE Co-op has warned that up to 60,000 small shops across the UK could face closure without upcoming business rates reform for small shops.

In the 2024 Autumn Budget, Chancellor Rachel Reeves promised to provide permanent business rates relief for small retail properties.

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At the time, the Government proposed raising business rates on the biggest retail properties with values over £500,000.

This would allow for a discount on rates for small retail and hospitality premises to be permanent.

The government has not yet set the rates, but changes are due to take effect in April 2026.

But the Co-op is now urging the Government to commit to the maximum levels of relief for smaller stores in the upcoming Autumn Budget on November 24.

Research conducted by the supermarket found one in eight small high street business owners will be at risk of shutting down if reforms are not delivered.

A further 10% of small said they would need to lay off staff.

Shirine Khoury-Haq, Co-op group chief executive, said: “The proposed system would improve the financial situation of 99% of retailers.

“How much they are protected from tax rises depends on decisions made in this Budget. To boost local economies, create jobs and provide community cohesion, we need inclusive growth.”

“That means supporting the businesses on the corners, in the precincts, on the parades and the high streets of every community.

” In order for them to not only survive, but to thrive, the government has to commit to the maximum levels of relief.” 

It comes as many larger retailers have voiced concerns over plans to increase business rates on larger stores, arguing the move could make them unprofitable or lead to price hikes.

In August, a letter signed by Morrisons, Aldi and JD Sports, warned that further tax rises on businesses could result in the Labour government breaking its manifesto pledge to provide “high living standards”.

It reads: “As retailers, we have done everything we can to shield our customers from the worst inflationary pressures but as they persist, it is becoming more and more challenging for us to absorb the cost pressures we face.”

Analysis carried out by the British Retail Consortium also suggested that 400 larger-format stores, such as department stores and supermarkets could close if the changes took place.

Many businesses have already seen their labour costs rise thanks to the rate of employer national insurance being increased in last year’s Budget.

The Treasury expects the new rates system will only impact the top 1% of properties.

A Treasury spokesperson said: “We are creating a fairer business rates system to protect the high street, support investment, and level the playing field by introducing permanently lower tax rates for retail, hospitality, and leisure properties from April that will be sustainably funded by a new, higher rate on less than 1% of the most valuable business properties.

“Unlike the current relief for these properties, there will be no cash cap on the new lower tax rates, and we have set out our long-term plans to address ‘cliff edges’ in the system to support small businesses to expand.”

IF a Chinese bloke had been caught spying for the UK in Beijing, he’d currently be hung up by his toes in a cell, awaiting execution.

That’s how the Chinese sort things out. Nobody in Beijing would be worrying much if the UK is a threat or not.

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Bullet or lethal injection, Wu’s yer uncle.

Or maybe they would be pawed to death by an angry panda.

But it’s more often a bullet between the eyes.

Most countries take spying and espionage very seriously.

Indeed, ensuring we are safe from foreigners who might do us harm is the first duty of a government.

But clearly it is a duty that Sir Keir Starmer does not take remotely seriously.

Last week, two Brits were due to be tried for spying for the Chinese.

They were Christopher Cash, a parliamentary researcher, and Christopher Berry, a researcher who works in China.

Both deny any wrongdoing.

But suddenly, at the last minute, the Crown Prosecution Service dropped the case.

It didn’t bother explaining why — one minute the trial was on, the next it was dead meat.

Industrial secrets

It now transpires that the CPS took advice from British government officials.

It is entirely possible that the UK’s National Security Adviser, Jonathan Powell, a good mate of Keir, was one of the officials involved.

Shortly after their meeting with the CPS, the decision was taken to drop the case.

Why? They apparently told the CPS China couldn’t be called a “threat” to the UK.

Instead, it was just a “geo-political challenge”.

And so the charges against Cash and Berry wouldn’t stick.

In a previous spying case it was decided that charges were relevant only if it involved “a country which represents, at the time of the offence, a threat to the national security of the UK”.

Have you ever heard anything more ridiculous?

If China isn’t a threat to the UK, then who is?

The head of MI5, Sir Ken McCallum, has reported that the Chinese have tried to entice 20,000 Brits to act as spies for them, against our interests.

Did nobody think to ask Sir Ken if he thought China was a threat? I suspect I know the answer that would have been forthcoming

He also claimed that 10,000 UK businesses were at threat from the Chinese trying to nick industrial secrets.

In addition, he said that MI5 had 2,000 current investigations into Chinese spying activity — and that a new case was opened on the Chinese — behaving very deviously indeed — every 12 hours.

Did nobody think to ask Sir Ken if he thought China was a threat?

I suspect I know the answer that would have been forthcoming.

Of course the country is a threat.

It is menacing other nations down in South East Asia.

It has a whole bunch of nukes pointed directly at the West.

It arrests dissidents who want western-style freedoms.

And it does everything it can to undermine the UK’s politics and industry.

Truth be told, anybody who is working secretly for a foreign country in the UK is a threat to this country.

Especially if they are working in the House of Commons.

This seems to me so obvious that it should not need stating.

If their secret outside income involves a vast load of Yuan, some fortune cookies and cans of bubble tea, then we should investigate very seriously.

The truth in this particular case, though, is particularly damning.

It seems almost certain that Whitehall officials intervened at the behest of the Government.

And that they did this so as not to p**s off the Chinese — because aside from being a threat to the UK, which China certainly is, we are going cap in hand begging for investment from them.

Other nations don’t have a problem with employing a dual approach.

Make no mistake, we may need to do business with the likes of China, much as we did once with Russia — but they ARE the enemy

They understand that while they all need to do trade with horrible totalitarian countries such as China, they also need to count their spoons, if you get my meaning — and at the slightest sign of devious behaviour, call them out.

The Chinese understand this too.

Yes, being caught with a bunch of spies in our Parliament may be embarrassing for a short while.

But it won’t be allowed to get in the way of China making more money.

It seems that our government was too frit to risk it.

Too scared that the Chinese might react nastily and pull investment.

Or decide not to invest in the future. We mustn’t offend the Chinese.

Strategies like this simply do not work — and the Chinese, just like their big mates the Russians, will continue to spy on our institutions and do everything they can to harm our state.

Enemy is laughing

Make no mistake, we may need to do business with the likes of China, much as we did once with Russia — but they ARE the enemy.

And currently an enemy that is laughing its head off.

The government officials involved will be coming before the House of Commons Joint Committee on National Security Strategy.

If it is discovered that Jonathan Powell did warn off the CPS from pursuing the cases against Cash and Berry, then Powell should resign or be sacked.

Unless, of course, Powell was simply doing the bidding of the Prime Minister or the then Foreign Secretary, the intellectual colossus who is David Lammy.

If that’s the case then THEY should resign.

One way or another, we cannot allow Chinese spies to run amok in this country of ours just because we want to trouser some more wonga down the line, through Chinese investment.

This is a truly important week for Starmer.

The Chinese spygate scandal is the most serious he has faced since taking office last July.

It could yet be the finish of the man.

Which won’t make me lose a terrific amount of sleep, I have to tell you.

THE Man Who Never Sweats is probably feeling a bit moist under the armpits right now.

It has been discovered that Prince Andrew was still sending chummy texts to disgraced paedo Jeffrey Epstein long after the royal said he was.

Andrew is alleged to have messaged him to say: “We are in this together.”

This happened 12 weeks after the point at which Andrew claimed, in that BBC interview, to have cut off all contact with the odious slimeball.

It’s high time King Charles took action and kicked Andrew out of his Royal Lodge home in Windsor Great Park.

I’M sure there must be some people on those pro-Palestinian marches who are not actually dyed-in-the-wool antisemites.

But if so, how do they react to a comrade saying that they “don’t give a f***” about the Jewish community?

Or the protesters in Glasgow who unfurled a banner praising the “martyrs” of Hamas for murdering about 1,200 Israeli civilians and taking 251 hostage on October 7, 2023?

Or the chants about killing the IDF?

Or the demands for Israel to cease to exist?

Or for a global intifada?

It is one thing to have a few doubts about Israeli Prime Minister Benjamin Netanyahu.

It is altogether another to stand alongside rabid, Jew-hating jihadis, chanting their odious slogans.

Isn’t it time these fellow travellers had a Mitchell and Webb moment and asked themselves: “Hey . . . are we the BAD guys?”

A TOP Tory minister has said she fears her hotel room was bugged on a fact-finding trip to Taiwan.

It comes after a case against an accused Chinese spy, Chris Cash, collapsed last month when the Government refused to class Beijing as a threat to national security.

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Chris Cash, 30, and his friend Christopher Berry, 33, were both accused and denied spying for China.

Cash, a parliamentary researcher, received high level briefings from former MI6 spooks, ambassadors and ministers before he was dramatically arrested.

The former teacher, who had lived and worked in China, was accused of passing secrets to Beijing.

The Crown Prosecution Service case against the two alleged spies collapsed with ministers blamed for failing to provide key evidence that China was a national security threat at the time.

Starmer has since claimed that there was nothing he could do about the issue and blamed the former government for not designating China a threat when the offences took place.

The Daily Mail has now revealed that at the same time the Government was refusing to designate Beijing a threat, then foreign secretary David Lammy was doing just that.

He branded China an enemy of Britain during a debate in the commons in an effort to defend Labour’s surrender of the Chagos Islands.

The Shadow National Security Minister, Alicia Kearns, 37, has now revealed that she was a target during the alleged spy operation.

In what is thought to be a spy dossier, details of her hotel room in Taiwan were found.

When the senior Tory minister was on a fact finding trip to the country as chairman of the foreign affairs committee, she fears she was bugged by Beijing.

She told the Daily Mail: “They could have got in that room at any time.

“You can’t be sure that the room hasn’t got a bug or a camera somewhere.

“There could be photos of you walking around your hotel room naked.”

China had threatened that the mother-of-three’s trip would result in “repercussions.”

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She worked alongside Mr Cash for a year and raised concern that others he met through work may have been exposed.

Chinese dissidents, victims of transnational repression and people intimidated in secret Chinese police stations in the UK may have all been laid bare to Mr Cash.

The Shadow National Security Minister continued, saying Mr Cash worked at the heart of government policy on China.

He gained insight from the Foreign Office, Home Office, Treasury and Department for Business and Trade according to Ms Kearns.

Mr Cash worked on key government policy around China including the TikTok ban on government devices and exposing covert Chinese police stations in the UK.

The alleged spy managed to speak to every top China expert in the UK, finding himself in a position to glean information as “valuable as gold dust” to Beijing Ms Kearns believes.

The revelations could raise more questions about why the case against the accused spooks was dropped.

Foreign Secretary Yvette Cooper admitted: “We know China poses threats to the UK national security.”

“I am deeply frustrated about this case, because I, of course, wanted to see it prosecuted.”

Ex-diplomat Charles Parton previously told The Sun that the Government’s refusal to brand Beijing a threat clearly showed “a desire not to offend China.”

Mr Parton, who was due to testify for the prosecution, slammed the CPS for failing to find new witnesses after the Government pulled its national security official at the last minute.

He told The Sun: “They are both to blame. The Government for withdrawing.

“But the CPS should have got some evidence from experts to say, ‘Is China a threat?’

“Then the jury could have said, ‘Yes, national security threat,’ and now we’re going ahead and trying this case.

“That smacks either of interference by the Government or just sheer incompetence.”

Chris Cash and Christopher Berry both deny all charges brought against them under the official secrets act.

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