Rachel Reeves

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.”

HIGH tax fears ahead of next month’s Budget have sent business confidence to its lowest level in three years, a survey shows. 

Company bosses fear a Groundhog Day experience as concerns grow they will bear the brunt of another slew of punishing taxes. 

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Optimism levels appear to be in freefall as tax concerns hit profits growth, recruitment and investment plans. 

Businesses have now lowered their expectations for the year ahead as muted domestic sales growth also drags down confidence — now at its lowest level since the end of 2022. 

Six in ten bosses say the tax burden is a growing challenge — a historic high for the survey and a big rise from just one in 16 making the claim towards the end of 2020. 

They also say that they were hurt by the £25billion National Insurance tax raid — and are now concerned about rises in next month’s Budget. 

Nearly half say regulatory requirements are the second biggest worry in a push for better performance. 

It comes ahead of the two-year roll out of a new workers’ rights package which will heap more red tape on employers grappling with costs. 

Concerns have been raised over giving day-one rights to workers and bolstered trade union rights.

Business sentiment is found to be weakest in the property sector, followed by retail companies, the research by the Institute for Chartered Accountants in England and Wales reveals. 

CEO Alan Vallance said: “It’s Groundhog Day for Britain’s businesses as we enter another run up to a Budget with poor growth, strained public finances and a fear that business will once again bear the brunt of higher taxes.” 

Chancellor Rachel Reeves is expected to try to find about £30billion to help plug the gap in the nation’s finances.

But she has been given an extra £2billion of wriggle room after borrowing stats showed inaccurate data on VAT receipts. 

UP here at the Tory Party conference in Manchester, comparisons between Kemi Badenoch and United’s Ruben Amorim write themselves. 

Two gaffers tasked with getting a once-formidable colossus back to winning ways — and both finding that nothing they do seems to work. 

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Supporters who long for the glory days of old are solemn, and the dressing room is fast losing faith. 

Both watch enviously as their gloating rivals in light blue continue to shine. 

Both beg for more time. 

After her bullish conference speech ­yesterday, Badenoch has bought herself that time. 

It was well delivered and she hit the right notes on the economy, welfare, crime and immigration. 

Her pledge to abolish stamp duty should also prick the ears of voters who until now have not been paying her ­attention. 

As an exercise in corralling despondent Tory members and seeing off any immediate leadership threat, it’s job done, Kemi. 

Back down to Earth 

Much the same can be said of Sir Keir Starmer’s run out in Liverpool, where he successfully united his party against their common enemy, Nigel Farage. 

He too delivered an address lapped up by his grassroots to the extent the prospect of impending mutiny melted away. 

The North West has been kind to them both, and they appear stronger. 

But the crashing thud of reality awaits them back in Westminster, where the mirage of the past fortnight will soon be shattered. 

Party conferences are bubbles frozen in time, and it is easy to be suckered into believing a leader has played a blinder just because their own side cheers them to the rafters. 

Both Badenoch and Starmer now need to come back down to Earth and confront some home truths. 

The first is that Nigel Farage is still leading the polls by a mile, opening up a 12-point gap according to More In ­Common.

May’s local elections are almost certain to be bloody, with the party at risk of ­falling to a humiliating fourth in both Wales and Scotland. 

Labour’s conference failed to make a dent, with the party registering “no change” in its position at 20 per cent ­compared to Reform’s 33 per cent. 

If Badenoch also fails to make inroads, the same doubts over her leadership will come flooding back. 

May’s local elections are almost certain to be bloody, with the party at risk of ­falling to a humiliating fourth in both Wales and Scotland. 

Badenoch’s allies are setting expectations on the floor — but as one of her Shadow Cabinet tells me: “You can roll the pitch as much as you like, nothing prepares you for the pain until it actually hits.” 

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Mass losses would spark a fierce ­internal debate between those gunning for regicide and those who despair at the thought of the Tories killing off yet another leader. 

One prominent donor has been telling friends that he will close his chequebook forever if Badenoch is toppled. 

Whereas a Shadow Cabinet minister says: “If she’s not going to be Prime ­Minister, you might as well get rid of her now.” 

Her main rival, Robert Jenrick, is sitting back, but king cobras also sit back before they strike. 

While plotters are setting their watches for the May 1 polls, smart Tories are ­looking towards November 26 to mount a fightback. 

The upcoming Budget on that date was barely ­mentioned in both Manchester and ­Liverpool, but it could turn the fortunes of all parties on their head. 

Last year Chancellor Rachel Reeves claimed her £45billion tax raid was a one-off forced upon her by years of Tory ­economic recklessness. 

Now she is coming back for more in a Budget that risks being even more toxic. 

Bond markets have put the Chancellor in fiscal handcuffs, rightly stopping her borrowing even more money on the slate. 

Labour MPs have put her in a political straitjacket by vowing to vote down any serious spending cuts, including to the eye-watering benefits bill. 

Despite the chaos of Liz Truss, voters on YouGov’s tracker still view the Tories as the most trusted custodians of the public finances. 

And growth is so puny that it will barely move the dial, all pointing to ­taxpayers being rinsed even further to make the sums add up. 

Ms Reeves is privately furious with the Office for Budget Responsibility, whose decision to downgrade productivity leaves her with an even bigger black hole — in the region of £30billion. 

Perhaps she regrets fawning quite so much over the economic watchdog when it was a thorn in the Tory side. 

She is preparing to once again blame the Conservative record, but that is unlikely to wash for a second time, ­especially if she finds money to lift the two-child benefit cap to placate her own MPs. 

A fight on the economy is fertile ­territory for Badenoch, who spent much of yesterday attacking this “high-tax, low-growth doom loop”. 

Shock therapy 

Despite the chaos of Liz Truss, voters on YouGov’s tracker still view the Tories as the most trusted custodians of the public finances. 

Some at the top of the tree believe ­economic implosion is the shock therapy needed to get them back in the game. 

One Tory Shadow Cabinet minister tells me: “People don’t yet realise how bad things are, but be in no doubt, we are flying into the mountainside. And when we crash, that is our chance to make our case to the country once again.”

Farage will of course give this short shrift, arguing he is not only reaping ­justified anger from years of immigration failure, but also decades of working people feeling no better off. 

It is clear Badenoch still needs to go toe-to-toe on borders to have any hope of winning back voters. 

But if a miserable Budget sees voters crying out for economic competence, the Tories might at last have their pitch. 

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THE Chancellor has been dealt another setback after borrowing hit the highest level in five years, making Budget tax rises “inevitable”.

The Government borrowed more money than expected last month, at £18billion, according to the latest figures from the Office for National Statistics (ONS).

This was £3.5billion more than in August 2024.

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The interest on Government debt soared by £1.9billion to £8.4billion, which added to higher spending on benefits and public services.

This offset any boost from the National Insurance Contributions hike, the ONS said.

It marked the highest August borrowing since 2020, significantly overshooting the £12.8billion expected by economists.

The level of government borrowing was £5.5billion higher than the Office for Budget Responsibility forecast in March.

Meanwhile, borrowing for the first five months of the financial year hit £83.8billion.

This was £16.2billion higher than the same period last year and well ahead of the OBR’s £72.4billion prediction.

Martin Beck, chief economist at WPI Strategy, said: “The £10billion buffer the Chancellor pencilled in against her key fiscal rule in March has almost certainly gone.

“That means tax rises in November look inevitable.”

James Murray, Chief Secretary to the Treasury, insisted the Government “has a plan to bring down borrowing because taxpayer money should be spent on the country’s priorities, not on debt interest”.

He added: “Our focus is on economic stability, fiscal responsibility, ripping up needless red tape, tearing out waste from our public services, driving forward reforms and putting more money in working people’s pockets.”

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Lost decades

WE are now in a new cost of living crisis — or perhaps we never really escaped the first one.

A dismal report yesterday revealed family incomes are £20,000 less than they should have been had economic growth in the UK not flatlined after 2005.

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It means Brit households have effectively lived through two lost economic decades.

Covid, the credit crunch, war in Europe and energy price shocks were hammer blows.

But inflation is now firmly entrenched in the economy thanks to Rachel Reeves’s policies, which have directly driven up prices.

Her National Insurance rise has left hard-pushed customers facing bigger bills at the tills, as shops were forced to pass on huge extra costs.

Unnecessary Net Zero measures only add to the misery.

The irony is that yesterday’s report on living standards was by the Left-leaning Resolution Foundation.

Many of its former members are now sitting in Downing Street as key advisers to the Prime Minister and Treasury.

Yet most of their ideas to fix the economy are based on seizing ordinary people’s hard-earned savings, property taxes and taxing the rich so highly they flee the country.

Big business is already warning of the folly of this outdated 1970s-style approach.

Don’t do it, Chancellor.

Action, not talk

NEW Home Secretary Shabana Mahmood says she will not allow migrants to avoid deportation through bogus last minute claims that they are the victims of modern slavery.

She insists these “vexatious” appeals make a mockery of our laws.

Of course, she is right that migrants are gaming a broken asylum system.

But for all her tough talk, how exactly does she plan to do it?

Successive Home Secretaries have promised to do “whatever it takes” to secure our borders.

All have foundered on the immovable rock that is European human rights laws.

Those same laws which are defended to the hilt by her cabinet colleague, Attorney General Lord Hermer.

We wish Ms Mahmood well. But it’s actions that count.

Hope & glory

FOR all the talk of trade deals and tariffs worth billions there is one British institution that remains priceless.

Our Royal Family — such a vital asset to this country — once again totally charmed the world’s most powerful man, Donald Trump.

Amid the doom and gloom it’s good to remember that no-one does pomp and pageantry quite like us Brits.

IT was perhaps the most famous poster in election history. “Labour Isn’t Working,” proclaimed its simple slogan above a photo of a long, snaking queue outside an unemployment office. 

The image helped Margaret Thatcher’s Tories to win a decisive victory in 1979. 

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That poster could be revived today as the beleaguered Labour Prime Minister, Sir Keir Starmer, seems to be trapped in a kind of doom loop created by his party’s epic mismanagement of the economy. 

Growth is anaemic, the tax burden colossal. Just like in the late 70s, Britain is gripped by rising debt, inflation and unemployment, as well as increasing militancy in the public sector workforce, where recent generous pay settlements have fuelled a mood of greedy irresponsibility. 

Only yesterday the distinguished business leader Lord Stuart Rose, the former head of Marks & Spencer, warned that Starmer and his bumbling Chancellor Rachel Reeves had dragged Britain “to the edge of crisis.” 

In a bleak analysis, Lord Rose argued that because “there is no growth in the economy,” neither wealth nor jobs are being created. 

The parallel with the 1970s is at its most stark in the hostility to hard work. Fifty years ago Britain became known as “the sick man of Europe” because of its addiction to strikes, with an astonishing 29million working days lost in 1979 alone. 

Modern Britain has yet to plumb those depths, though the pig-headed unions are trying to go in that direction, as shown by the current miserable strike on the London Underground, which has paralysed the capital this week. 

What makes this strike so ridiculous is that the Tube drivers are extremely well-paid, typically earning around £72,000-a-year, and enjoy excellent job security, pensions, hours and holidays. Yet they act like they are oppressed members of the proletariat. 

The same is true of the resident doctors who went on strike last month in support of an outrageous 35 per cent pay claim. 

These grotesque demands are part of a wider culture of self-serving entitlement that is destroying Britain’s work ethic, reducing productivity and weakening the dynamism of business. 

That destructive spirit can be seen in the recent surge of sick leave in the national workforce, a phenomenon caused not by harsher conditions but by more indulgent management, and the fashion for treating normal emotions as mental health problems. 

Mental-health crisis 

Yesterday a study by the Chartered Institute of Personnel and Development revealed that employees are now taking an average of nearly two weeks off sick every year. 

Only two years ago absenteeism stood at an average of 7.8 days a year. Now that figure has risen to 9.4 days a year, with the mental-health crisis the key driving force. 

All too predictably, the record of the public sector is much worse than the private sector. That is not because work on the state payroll is tougher. Just the opposite is true. 

The heavily unionised culture of public employment, with its emphasis on workplace rights and victimhood, promotes weak management and a lack of accountability. 

The rise in absenteeism is mirrored by the growth in welfare dependency where ever increasing numbers of people think that the state owes them a living. Social security is no longer just a temporary safety net but has become a comfortable lifestyle choice. 

There are now 6.5million adults of working age who are claiming out-of-work benefits, while some forms of incapacity payments have become a sort of subsidy for early retirement. 

As Lord Rose puts it, “We have arrived in a situation in Britain today where there is effectively no obligation to work, absolutely none.” 

In a recent newspaper interview, one claimant called Clare Russell gave an insight into the mentality of some of the worst freeloaders. 

Labour likes to boast that it is the party of ‘working people’. Now it should live up to that description. 

Ten years ago she gave up work at the age of 46 and since then has lived off the disability benefits she receives for a bad back, as well as a substantial rental income from some property, plus a carer’s allowance to look after her mother who lives 30 miles away. 

In her sickening interview, she said that she has “a lovely life, thanks to the great British taxpayer.” 

Just to heighten the outrage she added, “when I am at the gym, I watch young people scuttle past the window on the treadmill of work and I must admit to feeling smug.” 

The disappearance of the work ethic is neither morally defensible nor financially affordable. 

The disability benefits bill is expected to reach £100billion by 2030 while the overall cost of welfare is forecast to go up from £210billion a decade ago to £380billion by 2030. 

The welfare leviathan is tracking us ever deeper into debt and towards national bankruptcy. 

In the depths of its current political crisis, France — which has an even more lavish benefits system than Britain — shows what can happen when the cost of welfare spirals out of control. 

We were the nation of the industrial revolution. We must revive that kind of drive and determination. This should be an absolute priority for the new Labour cabinet. 

Reform of welfare and the workplace is not an option, it is a necessity. 

Labour likes to boast that it is the party of “working people”. Now it should live up to that description. 

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IT may not be an imposing castle and there’s no Claudia Winkleman but Downing Street has become the stage for a real-life version of The Traitors.

Sir Keir Starmer set the scene for weeks of vicious plotting when he banished his faithful deputy from the Cabinet.

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His gushing letter to Angela Rayner after she was forced out was true to the hit TV series.

It could be summed up as: “So sorry, Ange. I really like you and I really, really hope it isn’t you. But I’ve got to go with my gut.”

But it hasn’t washed with her admirers who now see her as a standard bearer for Labour’s Left.

The problem for the PM is whether his ousted sidekick will be recruited by The Traitors — a clique of MPs and activists hellbent on revenge.

They think Sir Keir is the real traitor — a class traitor — and are ready to unleash anger and resentment that has been building up over the past 14 months.

‘Knives are out’

When Ms Rayner quit as Deputy PM and Housing Secretary, she also stood down as Labour’s Deputy Leader — an elected position.

The search for her successor will become a divisive and bloody battle for the soul of the party.

One activist declared: “It’s going to be carnage. The knives are out already — and many of them are aimed at Starmer’s back.

“Most MPs can’t stand him or his politics, and over the past week their hatred has gone off the scale.”

Ms Rayner and her supporters are not the only people to harbour a grudge against the PM.

Her departure forced him into a hasty Cabinet reshuffle in which several of her colleagues were also thrown under the bus.

One minister dumped in Sir Keir’s shake-up even vowed privately: “I’m going to f*** him up.”

The deputy leadership race could now turn into a proxy war to destabilise the PM and find his successor.

There are whispers about a stalking horse to pave the way for Manchester Mayor Andy Burnham to steal the crown and, bizarrely, that Ed Miliband is pondering a bid for a leadership comeback.

The scandal has also exposed the Prime Minister’s indecision and weakness — flaws he once levelled at Boris Johnson.

Sir Keir allowed Ms Rayner to cling on to her job for eight days after it was revealed she had avoided paying £40,000 stamp duty on her swish new seaside property at Hove, East Sussex.

It was clear that at the very least she was guilty of rank hypocrisy and had to go.

One of his biggest tests will be the Budget on November 26

You’d think after being gifted £2,400 of free spectacles, Sir Keir would have seen what was coming.

But he left it to an ethics adviser to reach the inevitable conclusion — and even then, the PM didn’t sack her but let her resign.

Sir Keir knows he must fix the economy and stop the boats if he has any chance of winning the next General Election.

But the Left has been angered and emboldened, and their opening salvos are likely to be fired at the Labour Conference in Liverpool later this month.

One of his biggest tests will be the Budget on November 26, when drastic action is needed to plug the £50billion black hole in Britain’s finances.

Normally, all the pressure would be on Rachel Reeves to deliver. But the PM sidelined the Chancellor last week to take personal charge of economic policy.

He appointed his own economics guru and poached Ms Reeves’s geeky number two Darren Jones as well as the Chancellor’s chief tax adviser to join his No10 team.

One disgruntled source said: “Keir has made it clear he plans to own the next Budget.

“If that’s the case, he can shoulder all the blame when it goes down like a bag of cold sick.”

Cabinet heavyweight Pat McFadden has been put in charge of forcing through welfare reform, months after benefit cuts were ditched amid a backbench rebellion. His task just got a lot harder.

Time to get a grip

Another big mission — which eclipses any TV challenge Claudia could set — is to tackle the asylum crisis.

Voters are desperate to see this Government deliver on its promises soon

Sir Keir staged a clear-out of the Home Office at the weekend, removing Home Secretary Yvette Cooper and two of her ministers following their failure to stop the boats and close migrant hotels.

Hardly a surprise, as Sir Keir has had more success removing ministers than asylum seekers.

He has ushered in tough-talking former Justice Secretary Shabana Mahmood — who supports chemical castration for serious sex offenders — to head up the dysfunctional department.

The PM knows that if she is unable to get a grip of the nation’s number one concern, he won’t be given time to send in a third team.

Voters are desperate to see this Government deliver on its promises soon.

Sir Keir returned from his summer break to declare he had begun “phase two” of his plan to change Britain.

If it continues like this, there won’t be any time for a phase three.

Voters will ask Sir Keir to reveal whether he’s a Faithful or a Traitor.

Then banish him from Number 10.

REFORM MP Lee Anderson wants schoolkids to wave Union Flags and sing the National Anthem at morning assembly.

Not so much Cool ­Britannia as School Britannia.

WHILE the nation was entranced by the Angela Rayner scandal, the Green Party elected a former hypnotherapist as its new leader.

Zack Polanski once claimed he could help women who wanted larger breasts by unlocking the power of their minds.

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Now he’s turned his attention to growing his membership before persuading the rest of us to reverse Brexit.

I can only imagine how he’ll do that.

Perhaps he’ll mesmerise us into a second referendum with an election speech which goes: “Look into my eyes, look into my eyes.

One, two, three . . . you’re back in the EU.”

HIKING gambling taxes at the Budget would “backfire” and push punters to the unsafe black market, the sector has said.

Chancellor Rachel Reeves has been warned not to press ahead with proposals to introduce a single remote betting tax amid the damage to horse racing.

Enormous damage would be caused if the 15 per cent tax paid by bookmakers is brought into line with online gaming which is taxed at 21 per cent.

Horse racing will go on strike next Wednesday when four race meetings are put on hold in protest at the proposed changes.

The horse racing industry would be dealt a £66 million a year hit and threaten thousands of jobs.

Ministers have been warned that any such move will have be catastrophic for racing’s fragile finances with punters also being driven to illicit markets.

A spokesperson for the Betting and Gaming Council said: “Hiking gambling taxes would backfire spectacularly.

“Far from boosting the Treasury, it will push punters towards the unsafe black market, which pays no tax, backs no sport and has zero standards.”

They add that it would shrink the legal market and damage sport.

The industry says it already pays £4 billion in taxes, supports 109,000 jobs and pumps £6.8 billion into the economy.

Ex-PM Gordon Brown has called for an increase on gambling taxes to help take children out of poverty.

The Treasury has previously said: “We are consulting on bringing the treatment of online betting in line with other forms of online gambling to cut down bureaucracy – it is not about increasing or decreasing rates, and we welcome views from all stakeholders including businesses, trade bodies, the third sector and individuals.”

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HOUSEHOLDS across the country are being warned to brace for a financial squeeze as the cost of government borrowing skyrockets to levels not seen since 1998.

This now directly threatens to push up mortgage rates and could usher in a new wave of tax hikes.

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The pound has tumbled in response to the growing unease, highlighting investor concern over the UK’s economic stability. 

At the heart of the issue are government bonds, known as “gilts,” which the government issues to borrow money.

These bonds offer investors a return, referred to as the “yield.”

In recent weeks, gilt yields have been rising rapidly, making it more expensive for the government to borrow.

This morning, yields soared further, with 30-year gilts reaching 5.72% – the highest level in nearly 30 years – while 10-year gilts climbed to 4.85%.

This spike signals that investors are nervous.

They are demanding a higher return to lend to the UK, worried about stubborn inflation and a gaping £51billion hole in the nation’s finances.

The rise in government borrowing costs is putting serious pressure on household budgets in two key ways

Firstly, it’s driving up mortgage rates.

The link between government gilt yields and mortgage rates is direct and unavoidable.

Lenders use “swap rates,” which closely track gilt yields, to set the prices of fixed-rate mortgage deals.

As these rates climb, fixed mortgages become more expensive.

Since August 1, two-year swaps have risen from 3.56% to 3.74%, while five-year swaps have gone from 3.63% to 3.83%.

Major lenders like Barclays have already started increasing rates, and even a small rise can add significantly to monthly payments on a typical £200,000 mortgage.

With swap rates continuing to rise in recent weeks, experts warn that mortgage rates are likely to increase further.

Separately, Chancellor Rachel Reeves faces a difficult challenge in her Autumn Budget, scheduled for November.

Higher borrowing costs are eating into public funds, and many economists believe tax increases will be necessary to fill the financial gap.

Although the government has promised not to raise income tax, national insurance, or VAT for “working people,” other tax measures are reportedly being considered.

One proposal is applying National Insurance to rental income, which critics fear could result in landlords passing on the cost to tenants through higher rents.

Another idea being debated is replacing stamp duty with an annual property tax, which could affect homeowners.

There are also rumours of reducing pension tax relief or cutting the tax-free lump sum, moves that could generate billions but might hurt savers.

Plus, there’s speculation about lowering the VAT threshold, which would bring more small businesses into the tax system.

This could increase their costs and potentially lead to higher prices for consumers.

Reeves is expected to make economic growth the centrepiece of her next Budget, warning that Britain’s economy is “stuck” and in need of bold solutions.

What can you do about it?

None of the proposed changes have been confirmed yet, and the government hasn’t ruled them out either.

However, any new measures won’t take effect until after the Budget in November.

It’s important not to make rash decisions based on speculation.

If changes are announced, you’ll have time to act and protect your finances before they come into effect.

For instance, if stamp duty is replaced by an annual property tax from a certain date, you could move house before the deadline to avoid the extra cost.

Similarly, if the government introduces capital gains tax on high-value properties, you might consider downsizing to a smaller home before the change is implemented.

 Rob Morgan, chief analyst at Charles Stanley, said: “Taking pre-emptive action can outright backfire.

“Last year some people were concerned about restrictions around taking tax free cash from pension and took withdrawals they wouldn’t have otherwise made.

“This removed the money from a tax-efficient environment and potentially stored up tax issues that will come back to haunt them.

“Instead, it’s best to wait to see what happens, consider the consequences, and take advice as required before acting.”

Most of the proposed measures are likely to affect only the very wealthy, so you may not be impacted at all.

If you’re concerned, there are steps you can take to prepare and safeguard your finances.

Check your financial health

If you are worried about your finances then you should speak to a financial adviser.

They will be able to offer you advice about your situation and explain if any of the measures will affect you.

You can find one using unbiased.co.uk – but remember, you will pay a fee.

It’s good practice to sit down and take stock of your finances every six months and work out a plan.

Work out all your bills and outgoings and what income you have and factor in any changes, such as bills going up or new income streams.

Think about what you need to do to make the most of your money. For example, do you need to prioritise paying off debts or saving for a house deposit.

Our guide to paying less tax legally could help you avoid giving away more cash to the tax man than necessary.

Review your mortgage deal

If your mortgage deal is coming to an end soon, act now.

Locking in a fixed rate could shield you from rising rates and market uncertainty.

Aaron Strutt, of mortgage broker Trinity Financial, said “For the moment there have not been significant price hikes but it’s probably worth locking in a mortgage rate if you are buying somewhere or due to remortgage, to try and keep away from any market turbulence.”

If you are coming to the end of a fixed deal, most lenders let you lock in a new rate up to six months beforehand, which can be worth doing.

If rates fall after you agree a new deal, some lenders will let you sign a new one at a lower rate.

Think when investing

Gold prices surged to a record high of $3,546.99 per ounce (£2,643.82) on Wednesday, marking its seventh consecutive daily rise.

Investors are flocking to the precious metal as a safe haven amid inflation fears and fiscal uncertainty.

However, financial advisers suggest maintaining a balanced and diverse investment portfolio as a better strategy for managing market volatility.

A small allocation to gold (5-10%) can be useful, but it shouldn’t be the core of your investment plan, according to Charles Stanley.

Don’t forget a will

If you’re concerned about potential changes to inheritance tax, it’s essential to have a will in place.

Without a will, your estate will be subject to intestacy rules, which could result in a higher inheritance tax bill.

This is especially important for unmarried couples, as they won’t automatically inherit from each other, even if they’ve lived together for years.

Check how to make one in our guide.

Make your savings work harder

More than 31million bank customers have £186billion in savings accounts earning just 1.5% interest, according to banking app Spring.

These accounts generate £2.3billion a year in interest, but savers could earn over three times more by switching to accounts offering up to 5% interest, The Sun can reveal.

The average bank customer has around £10,000 in savings, according to Raisin.

If that £10,000 is kept in an easy access account earning 1.5% interest, it would generate just £150 in interest each year.

But switching to Cahoot’s 5% easy access account would boost that to £500, earning you an extra £350.

If your savings account pays less than the current inflation rate of 3.8%, it’s time to look for a better deal.

CHANCELLOR Rachel Reeves was warned she will hit tenants if the Treasury pursues plans to hike taxes on landlords.

She is considering putting National Insurance on rental income to fill a £50billion black hole at the autumn Budget.

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But housing experts blasted the move.

TV property show presenter Kirstie Allsopp, said: “This is tenant bashing under the guise of landlord bashing. It’s like having the economy run by Baldrick.”

Ben Beadle, of the National Residential Landlords Association, said: “This will hit the very households the Government wants to protect.”

Earlier in the week, The Sun reported that firms were bracing themselves for a £2.5billion Labour tax double whammy.

They would be clobbered twice — first by an inflation rate increase in business rates in April, then by a Rachel Reeves surcharge, experts said.

Business rates are the property tax that companies must pay just to occupy their shops, pubs, factories and offices.

The Tories warned thousands of struggling firms would be crippled.

Shadow Housing Secretary James Cleverly said: “Once again, Labour is hammering the high street. Raising business rates for thousands of hard-working small businesses across England was one of Labour’s first acts in office.

“And despite our opposition to it, and clear evidence of the damaging impact it will have, they have pressed ahead — consequences be damned.”

The first squeeze would come in April when bills rise automatically with inflation.

The Bank of England expects the rate will hit four per cent next month.

Global tax firm Ryan said that would add £1.11billion to business rates across England.

The second blow would come when Chancellor Ms Reeves introduces a supplementary multiplier on larger premises next year.

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HUNDREDS of thousands of Brits could be hit by a surprise £500 tax bill as a new rule comes into effect. 

The new scheme could affect nearly 900,000 business owners across the UK. 

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The Government’s new Making Tax Digital scheme will require people over a certain income threshold to keep electronic records and file updates every financial quarter.

The move is part of the Government’s efforts to crack down on tax fraud, which cost Britain £12.4 billion from 2021 to 2022.

However, financial advisors have warned that the cost of reporting your tax figures could cost up to £500 a year once staff training, software and admin time are factored in – according to George Holmes, managing director of Aurora Capital. 

Only people who earn £50,000 from self-employment or from rental properties will be subject to the new rules.

Ahead of the change, Craig Ogilvie, director of Making Tax Digital at HMRC, said: “With April 2026 on the horizon, we are issuing letters to customers we believe will be mandated, outlining specific requirements and timelines.”

He added: “We urge those who meet the mandate criteria to join our testing programme on GOV.UK now to help shape the final service and make your transition smoother.”

An estimated 864,000 sole traders and landlords will need to comply with the new rules.

James Murray MP, Exchequer Secretary to the Treasury, said: “MTD for Income Tax is an essential part of our plan to transform the UK’s tax system into one that supports economic growth.”

Murray added: “By modernising how people manage their tax, we’re helping businesses work more efficiently and productively while ensuring everyone pays their fair share.”

The news comes after experts warned Rachel Reeves that she would have to find £50 billion to plug a black hole in Britain’s finances. 

The Chancellor has remained committed to her fiscal rules, which requires the UK to have financial cushion of £9.9billion by the end of the decade.

In order to put the UK’s finances on a firm footing, experts from the National Institute of Economic and Social Research have said that Ms Reeves will have to raise taxes.

Prof Stephen Millard, from the institute, said: “We would advocate building a bigger buffer. 

“To do that requires moderate but sustained increases in taxes.”

The think tank also upped its growth forecast for this year to 1.3 per cent but knocked their prediction for 2026 down to 1.2 per cent from 1.5 per cent.

Meanwhile, tax refund letters have started landing on doorsteps across the UK but Brits have been warned to watch out for scams.

A Freedom of Information (FOI) request by The Sun found that HMRC refunded a staggering £8.3billion in overpaid tax from 2022 until 2023 — with the average worker pocketing £943.

However, any letter or email which requires you to give your credit card details, transfer money or click a link should be avoided at all costs. 

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FEARS are growing that Rachel Reeves could slap a new tax on people’s homes to replace stamp duty and council tax.

The Chancellor is studying plans for a levy on houses worth over £500,000, according to The Guardian.

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The paper said the Treasury is looking at a “proportional property tax” which would be paid when owners sell their homes.

It claimed the shake-up could also pave the way for a new local levy to replace council tax, which is still based on 1990s property values.

But Treasury officials last night insisted that while tax reform is being explored, the details – including any threshold or rate – have not been decided.

A Treasury spokesperson said: “The best way to strengthen public finances is by growing the economy – which is our focus.

“Changes to tax and spend policy are not the only ways of doing this, as seen with our planning reforms, which are expected to grow the economy by £6.8bn and cut borrowing by £3.4bn.

“We are committed to keeping taxes for working people as low as possible, which is why at last Autumn’s Budget, we protected working people’s payslips and kept our promise not to raise the basic, higher or additional rates of Income Tax, employee National Insurance, or VAT.”

The Sun reported yesterday that homeowners would be forced to hand over £82,000 to the taxman thanks to Reeves’ inheritance tax raid.

Inheritance tax is charged on all assets above the £325,000 threshold, which is called the nil-rate band.

Anything above this threshold is charged at 40%, but your tax-free allowance rises by £175,000 if you leave your home to a direct descendant, such as a son, daughter or grandchild.

Currently, pension pots are exempt from inheritance tax – but this will all change from April 2027, when they will suddenly be subject to the 40% levy, following a tax grab announced in last year’s October Budget.

The change is expected to increase the number of estates paying death duties from 4% to 9.7%, dragging thousands of people into the tax net.

New analysis by Quilter shows that grieving families could face a nasty bill sting following the changes.

KEMI Badenoch has thrown down the gauntlet to Keir Starmer on the economy demanding no stealth taxes on Brits.

The Tory leader has written to the Prime Minister saying “tax rises are a choice”.

She has challenged him to repeat Chancellor Rachel Reeves’ promise at the Budget last year not to extend the freeze on income tax and National Insurance thresholds.

Failing to end the freeze as planned in 2028 would mean millions more Brits are forced into paying a higher rate of tax under fiscal drag.

This is when people are pulled into higher income tax brackets as inflation pushes their wages up.

It comes after a bombshell report said the Chancellor must find £50billion in her autumn Budget to keep the country’s finances in check.

She will have to raise taxes or cut spending to maintain her stated financial cushion of £9.9billion by the end of the decade, according to the National Institute of Economic and Social Research.

At the Budget, Ms Reeves said: “Extending the threshold freeze would hurt working people.

“It would take more money out of their payslips.

“I am keeping every single promise on tax that I made in our manifesto, so there will be no extension of the freeze in income tax and national insurance thresholds.”

Ms Badenoch asked the PM: “I am writing to you to ask: does this remain government policy?”

A Labour spokesperson said: “We’ll take no lectures from this failed Tory Party.

“They crashed the economy which sent bills and mortgages rocketing, and left a £22 billion blackhole.

“Kemi Badenoch’s next letter should be an apology to hard-pressed households for the Conservatives’ role in hammering their family finances.

“Labour is the only party focused on creating a fairer Britain.”

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A BELOVED department chain is preparing to shut its final store this month as it launches a “Rachel Reeves closing down sale.”

The famous shop will be shuttering forever after serving customers on the high street for 140 years.

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Beales in the Dolphin Centre in Poole will close on May 31 and is slashing the price of stock by 80 per cent in the meantime.

The historic chain was founded in Bournemouth in 1881 and offers a range of iconic products, including clothing, home goods, and more.

This particular Poole Beales branch was the last one standing when the company collapsed into administration in January 2020, leading to the closure of its 22 other stores.

Despite the stores resilience, the brutal budget introduced last year saw the hike of National Insurance which has forced countless shops to close.

To mark the occasions, the store’s Facebook page is advertising a “Rachel Reeves‘ Closing Down Sale,” featuring discounts of up to 80% and a caption cheekily thanking the Chancellor for “the help.”

It wrote in the caption: “Our closing sale is almost over (cheers for the help, Chancellor) – and we’ve just dropped hundreds of lines to 80% OFF or more!

“Grab a bargain before we vanish into the budget black hole. #FinalSale #80Off #LastChance #WhenItsGoneItsGone.”

Despite weathering the storm for the past five years, it seems the Chancellor’s latest Budget changes have delivered the final blow to the struggling chain.

Beales chief executive Tony Brown previously told The Telegraph the business had become “unviable” following the Chancellor’s announcement of increases to the minimum wage and national insurance contributions in the October Budget.

Announcing the closure, Mr Brown said: “This, combined with the risks and uncertainty of further tax increases in the coming years, has left us with no alternative.

“We have been working with the Dolphin Centre, who have been supportive, along with our investors to ensure an orderly exit.

“Our team has been informed, as have our suppliers.

“We will ensure the exit is managed and no one will be left with a financial loss.”

Shoppers were left heartbroken by the news of the store’s impending closure, with one commenting on the latest post: “I’ve loved shopping here over the years.”

Another wrote: “Sadly this is happening to many shops.”

Like many businesses, Beales now faces higher employer national insurance contributions, which have risen from 13.8% to 15%.

Additionally, the threshold at which these contributions must be paid has been lowered from £9,100 to £5,000.

These changes to the tax system were confirmed by the Chancellor in the Autumn Budget last October and came into effect on 1 April.

At the same time, the national minimum wage saw a notable increase, rising to £12.21 per hour. For workers aged 18-20, the minimum wage increased by £1.40 to £10 per hour.

Founded in 1881, Beales once boasted a proud portfolio of 41 department stores in market towns across the UK, offering everything from furniture and fashion to toys and cosmetics.

The retailer’s decline has been gradual but unrelenting.

Its Southport store was shuttered last September, just three years after the site had reopened.

With the closure of the Poole branch, the last remaining link to the Beales name, a once-iconic fixture of the British high street, will vanish forever.

DEATH OF THE HIGH STREET

Retailers have been feeling the squeeze since the pandemic, while shoppers are cutting back on spending due to the soaring cost of living crisis.

High energy costs and a move to shopping online after the pandemic are also taking a toll, and many high street shops have struggled to keep going.

However, additional costs have added further pain to an already struggling sector.

The British Retail Consortium has predicted that the Treasury’s hike to employer NICs from April will cost the retail sector £2.3billion.

At the same time, the minimum wage will rise to £12.21 an hour from April, and the minimum wage for people aged 18-20 will rise to £10 an hour, an increase of £1.40.

Experts have said small high street shops could face a particularly challenging 2025 because of Budget tax and wage changes.

Professor Bamfield has warned of a bleak outlook for 2025, predicting that as many as 202,000 jobs could be lost in the sector.

“By increasing both the costs of running stores and the costs on each consumer’s household it is highly likely that we will see retail job losses eclipse the height of the pandemic in 2020.”