Thinktank says UK could raise significant funds by tackling some of the longstanding ‘inefficiency and unfairness’ in tax system
Rachel Reeves must avoid “a half-baked dash for revenue” or risk damaging economic growth as the chancellor seeks to close a large gap in next month’s budget, the Institute for Fiscal Studies has said.
The tax and spending thinktank has warned there was a danger the chancellor would create “unnecessary economic damage” if she chooses to stitch together unrelated tax-raising measures to cut the shortfall in government revenues and keep within her fiscal rules.
In a chapter from a report due to be published later this month, the IFS said Reeves could raise tens of billions of pounds in extra revenue without breaking Labour’s manifesto pledges, but cautioned that higher rates on longstanding, poorly designed taxes would have a detrimental effect on incentives to work, productivity and economic growth.
“A budget focused purely on the politics could prove considerably worse on the economics,” the thinktank said.
