Middle Britain braced for Reeves' £30bn Budget raid

FEARS OF MORE TAX HIKES

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This week's humiliating U-turn on welfare reform, which she said would be "reflected in the Budget".

She has insisted she will not change her fiscal rules, leaving tax rises as the most likely option.

It is the clearest hint yet that taxpayers are set to be penalised for the Government's capitulation to Labour MPs opposed to any attempt to bring Britain's bloated benefits bill under control.

Economists have warned that the looming crisis could leave the Chancellor with an eye-popping £30 or even more to find. That is equal to the sum brought in by her record tax-raising Budget in 2024, which she promised not to repeat.

Paul Johnson, the outgoing director of the Institute for Fiscal Studies, said the only way for the Chancellor to raise "big money" was to target income tax, national insurance and VAT for middle-income earners.

He told the BBC: “If we're looking at £30billion, which is quite plausible, I can’t see a way in which you raise that kind of money without hitting people on middle incomes, as they did, of course, with the national insurance increases last year.

“If you're looking for big money, then it has to be something in income tax, national insurance and VAT. To raise that kind of money, you're looking at people on middle kinds of income.”

Mr Johnson added the Chancellor may have to break Labour's election manifesto pledge of ruling out increases in corporation tax, as well as income tax, national insurance and VAT.

"That's three quarters of your tax base straight away," he said.