Blair warns Reeves any tax rises 'must be temporary'

Institute advises No 11 to avoid 'tax-and-spend doom loop'

- KATE DEVLIN

Rachel Reeves has been warned that she must slash taxes again before the next election if she breaks her key manifesto pledge and hikes them in the Budget.

Sir Tony Blair’s think tank also said that any tax hikes such as raising VAT or income tax must be done in tandem with pro-business policies to break Britain’s “tax-and-spend doom loop”.

The warning comes after the chancellor put the country on notice that manifesto-busting sweeping tax rises are coming later this month, saying during an unprecedented pre-Budget address that “we will all have to contribute”.

The Tony Blair Institute has now called for any major tax rises to be temporary, warning Labour should move to “targeted tax cuts” before the next election “once growth strengthens and public service reforms deliver results”.

The group also called for the chancellor to bring businesses who had been “bruised” by last year’s Budget “back onside” with measures that move beyond “the caution of the government’s first year in office”.

The Tony Blair Institute for Global Change (TBI) said any tax-raising measures must be paired with pro-business reforms that hard-wire growth into every major policy decision, making the UK a better place to invest, work and build.