Labour could hike taxes by £25billion at the Autumn Budget, a former Bank of England official has warned as Sir Keir Starmer warned that public finances are ‘more severe’ than feared.
Michael Saunders last night said Rachel Reeves’s imminent review of the nation’s fiscal inheritance could spark tax rises – largely on wealth and inheritance – within months.
Next week, the Chancellor is expected to publish a review of the state of the public purse.
She will likely warn that the Government faces ‘difficult decisions’ on tax rises and public spending after the Tory government’s record over the past 14 years.
Mr Saunders, a former member of the Bank’s Monetary Policy Committee which sets interest rates, told Bloomberg that the Chancellor could ‘kitchen sink’ the tax hikes at the budget to ensure the Tories absorbs the blame.
Sir Keir Starmer (pictured) warned that public finances are ‘more severe’ than feared
Rachel Reeves’ (pictured) imminent review of the nation’s fiscal inheritance could spark tax rises
A view of the Bank of England building, in London, Britain
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.’
His words came hours after Sir Keir claimed the public finances are ‘more severe’ than feared – prompting fears that he was preparing the ground to punish taxpayers this autumn.
The Prime Minister was jeered by Tory MPs after accusing the Conservatives of leaving a ‘crisis and a failure everywhere’ during their time in office.
He said: ‘We have a more severe crisis than we thought as we go through the books of the last 14 years.
‘There is a crisis and a failure absolutely everywhere after 14 years of failure.’
Last week, former chancellor Jeremy Hunt said Labour’s claims about the economy were ‘nonsense’ and said they should have been ‘honest’ about plans to raise taxes.
During the election campaign, Labour ruled out increases to income tax, national insurance, corporation tax or any form of wealth tax.
