As Rachel Reeves’ budget approaches, Westminster is braced for tax hikes. The political manoeuvring necessary may just be one of the greatest political challenges of her career.
So on this week’s episode of Westminster Insider, Sascha speaks to those who have been there, and compiles some golden rules on how to raise taxes – and get away with it.
Social Market Foundation Director and former Gordon Brown advisor Theo Bertram walks Sascha through Brown’s 2002 decision to raise National Insurance, and how he kept voters onside while he did it.
And Rishi Sunak’s former advisor James Nation explains why Sunak’s health and social care levy was such a difficult tax rise to announce – and how he tried to mitigate the political blowback.
Jeremy Hunt, former Conservative Chancellor, defends not bringing back this tax rise and tells Sascha why freezing income tax thresholds – as Reeves is expected to do – was “less visible” than a hike to the basic rate of income tax, but still “very politically painful”.
And Sascha, with the help of Bloomberg journalist and author of Can You Run the Economy Joe Mayes, puts herself in the shoes of Rachel Reeves and goes through the options available to her to fill what is expected to be a £20bn blackhole in the budget.
Helen Miller, director of the Institute for Fiscal Studies, warns Britain is in for a productivity down-grade, and if she were Rachel Reeves, she would worry about whether or not the budget will “drag down growth”.