Labour affiliated think tank sets out tax options to close fiscal gap
The Fabian Society - a leading Labour-affiliated think tank - has set out a series of options to close the fiscal gap in a new report launched today.
Taxing Questions: How Labour can raise the revenue we need is an edited collection that gathers leading MPs, economists and policy experts. It sets out a range of ways in which the Chancellor, Rachel Reeves MP, can raise the revenue the country needs to balance the books and invest in public services.
Speaking on the report, Joe Dromey, General Secretary of the Fabian Society said:
“The Chancellor will need to raise tax revenue at the budget if she is to stick within her fiscal rules. This collection sets out how she could do so, without breaking Labour’s manifesto commitments.
“I argue that the best option available is to continue the freeze in income tax thresholds for a further two years. This would raise the majority of the funding the Chancellor needs, it would be highly progressive, and it would have little political risk”.
Essays across the collection recognise that the chancellor will have to make some difficult decisions ahead of the upcoming autumn budget. In particular, she faces a fiscal gap of over £20bn if she wants to stick within her fiscal rules.
With public services on their knees, cutting spending looks neither practically deliverable nor politically possible. Changing the fiscal rules, on the other hand, risks increasing debt costs. Increasing government revenue is the remaining option.
The options for tax increases it presents are progressive and avoid undermining the growth potential of the economy, while also keeping within the Labour Party’s manifesto commitments. It also includes an alternative view on the fiscal rules and makes the case for changing them.
It includes a foreword from Meg Hillier MP, Chair of the Treasury Select Committee and contributions from Liam Byrne MP, Chair of the Business and Trade Select Committee, Joe Dromey, General Secretary of the Fabian Society.
It also includes contributions from the Resolution Foundation, New Economics Foundation, Social Market Foundation, Good Growth Foundation, Public First and Positive Money.
Ends
Joe Dromey, general secretary of the Fabian Society and editor of the report is available for interview.
A full version of this article was published in a Fabian Society edited collection Taxing Questions – How we raise the revenue we need. Read the full collection here.
Media contacts:
Fabian Society Matt Patterson M: 07920 104025 E: Matt.Patterson@fabians.org.uk