Labour could hike taxes by up to £25 billion as expert sends 'startling' warning
A former Bank of England official predicts Labour tax rises of up to £25 billion.
Keir Starmer grilled on tax rises by Rigby in June
Labour could hike taxes by up to £25 billion in its first Budget, according to an ex-Bank of England official.
Michael Saunders said Chancellor Rachel Reeves could use a review of the state of Britain's public finances to pave the way for the move in the autumn.
He suggested Ms Reeves would “kitchen sink” the bad news to "allow her to announce corrective measures to return the public finances to a sustainable path".
The senior economic adviser at Oxford Economics said she could then “blame it all on the failings of her Conservative predecessors”.
The review by the Treasury could be “used to justify significant extra tax hikes, perhaps an extra £10bn to £25bn”, Mr Saunders told Bloomberg.
Mr Saunders said the tax rises could be unveiled alongside “a less aggressive squeeze on public spending and perhaps a tweak to the debt rule”.
The Tories seized upon the warning of the tax raid, which would go far beyond what was proposed in Labour's election manifesto.
A Conservative Party spokesman said: “This is a startling assessment.
“Labour should have been honest with the public about their plans during the election campaign.
“They must urgently clarify if they are going to break their promise to not raise taxes on working families and pensioners in retirement.”
It comes as Prime Minister Sir Keir Starmer today declared that the “crisis” in the UK’s public finances was “more severe” than he had expected.
Speaking at Prime Minister's Questions, he said: “We have a more severe crisis than we thought as we go through the books of the last 14 years.”
Tory MPs jeered as Sir Keir went on: “I know they don’t like it. There was a reason the electorate rejected them so profoundly.”
He added that “there is a crisis and a failure absolutely everywhere after 14 years of failure”.
A Treasury spokesperson said: “The Chancellor has commissioned officials to provide an assessment of the state of the government’s spending inheritance which will be presented to Parliament before the summer recess.”
