No more tinkering, time to rip up the entire tax system

With a tax-raising Budget looming, every think tank and its aunts, uncles and cousins are busy sharing their fever dreams of what Rachel Reeves should and shouldn't be doing. Chancellor, chancellor! Listen to me...

- JAMES MOORE

But if there's one person she ought to be taking seriously, it's Isaac Delestre, senior research economist at the Institute for Fiscal Studies (IFS), who hit the nail when he said: "The last thing we need in November is directionless tinkering and half-baked fixes." What Britain's faltering economy needs instead is something... dramatic.

Fortunately, the IFS report not only contains good - and dramatic - ideas, but some of them might actually work.

As we know, Reeves is in a nasty bind, with a multibillion-pound fiscal black hole sucking the life out of Keir Starmer's government. She has to plug it, because if she doesn't, she risks plunging the nation into a financial crisis. You can't buck the markets - just ask Liz Truss - and the markets have made it clear that Reeves must stick to her fiscal rules. They hold that the government should not borrow to fund day-to-day expenditure.

The black hole now estimated to have hit £40bn - has been created because the chancellor isn't bringing in enough from taxes. A sluggish economy only makes the hole bigger. Her job is likely to be further complicated if the Office for Budget Responsibility (OBR), which marks chancellors' homework, downgrades its economic forecasts following her second Budget.

The problem for Reeves is that she can't turn to any of the easiest ways to raise revenue: hiking income tax, VAT or national insurance. Labour promised not to increase them in its manifesto.

There are also significant problems with targeting the next four biggest contributors: corporation tax, business rates, council tax and fuel duties, not least the promises Reeves made not to hit business again after she hiked employer national insurance contributions (Nics).