Commenting on reports that the Government intends to raise taxes following Sir Keir Starmer’s speech this morning, Tom Clougherty, Executive Director at the free market think tank the Institute of Economic Affairs, said:

“The government is softening voters up for a tax-raising budget in October.

“There is obviously a tension between raising revenue and prioritising wealth creation, and that will be especially pronounced when increases to the main, broad-based taxes – income tax, national insurance, and VAT – have been ruled out.

“The remaining possibilities – higher taxes on business, on savings, and on investment – are likely to have an outsized impact on growth, and as a consequence may not generate as much revenue as the government expects.

“It is also important to remember that the incidence of a tax doesn’t always fall on the person who pays it. Workers usually lose out when corporation tax is increased, for example. Significant tax increases that don’t affect ‘working people’ are a fantasy.”