Labour is drawing up plans to raise up to £10 billion in tax rises, it was claimed last night.
The party is said to be looking at options including increasing the likes of capital gains and inheritance tax to ‘unlock’ funds for public services.
The Guardian, which has previously reported that Shadow Chancellor Rachel Reeves is considering up to a dozen tax hikes in her first budget, said it had seen internal Labour documents discussing hikes on the sales of assets and making it more difficult to ‘gift’ money, property and land to relatives.
Labour has faced repeated questions about which taxes it will increase after experts questioned how it will fund public services in the future.
The Institute for Fiscal Studies (IFS), an influential think tank, has accused all major parties of a ‘conspiracy of silence’ over how they will address the shortfall.
Senior Labour figures have admitted that its election manifesto is not the ‘sum total’ of its spending plans, and that it hopes to do more if the economy improves.
The party has only ruled out increasing income tax, national insurance and VAT, as well as capital gains tax (CGT) on primary residences.
Labour is drawing up plans to raise up to £10 billion in tax rises, it was claimed last night
Shadow Chancellor Rachel Reeves is considering up to a dozen tax hikes in her first budget
Sir Keir Starmer and his frontbench team have repeatedly refused to rule out changes to other taxes, prompting the Tories to claim they are not being honest with the public.
The Guardian claimed the party could increase CGT in a bid to raise £8 billion and change inheritance tax to raise a further £2 billion.
Labour could make it more difficult to ‘gift’ money and assets, such as farmland, tax-free as part of a review of inheritance tax, it reported.
The party would consult on radical changes such as scrapping or updating the rules on agricultural land and business relief, it added.
A senior Labour source told the paper: ‘We are starting from ground zero with our public services and infrastructure. We have to show we are serious about borrowing and raising revenue from taxes if investors are going to walk in step with us. These measures are part of unlocking wealth and putting it to work.’
Labour is expected to present a range of options to the Office for Budget Responsibility for analysis, after gathering costings on individual measures from HM Revenue and Customs. The paper also suggested a budget could come in early October, as soon as party conferences are over.
At present, profits from the sale of second homes or shares in businesses are taxed at a much lower rate than wages under CGT rules.
A beneficiary can also claim up to 100 per cent relief on the inheritance of agricultural land if it is farmed, raising concerns in Labour that wealthy people are using this to avoid paying taxes.
Labour is also said to be looking at wider changes to the inheritance tax rules that allow people to make ‘gifts’ without paying duties as long as they live for more than seven years after they are made.
It came as Labour’s deputy leader Angela Rayner raised fears that Labour could increase council tax in the future after saying the party has no plans to do so ‘at the moment’.
Asked if Labour could look at council tax bands, she told BBC Radio Merseyside: ‘Well, look, you know, I think at the moment, if I’m really honest to your listeners, we’ve got a lot on our plate… our priority is not to do anything with the council tax banding at the moment.’
Senior Labour figures have contradicted each other over whether or not there will be changes to council tax if they win the election.
Last week, Mr Starmer failed to rule out a council tax increase. Earlier in the week, frontbencher Jonathan Ashworth said Labour would not look to revalue council tax bands.
Ms Reeves did not rule out looking at bands again, but said it wasn’t where she was going to put her ‘political energy’.
A Labour spokesman said: ‘Keir and Rachel have made clear that our priority is growing the economy, not increasing taxes.
‘We have set out fully costed, fully funded plans, with very specific tax loopholes we would close. Nothing in our plans requires any additional tax to be increased.’
Labour sources said the party did not recognise the memo detailing how much the taxes could raise which was quoted by the Guardian.
