Reeves 'must avoid half-baked fixes'

RACHEL Reeves could raise tens of billions from tax reforms without breaking Labour's manifesto pledges but must avoid "half-baked fixes" to Britain's economic woes in the Budget, leading economists have said.

- NINA LLOYD

The Government is under pressure to balance the books ahead of November's autumn statement, amid warnings of a black hole estimated to be as much as £50 billion in the public finances.

In a wide-ranging report, the Institute for Fiscal Studies urged the Chancellor to resist “simply hiking rates” without making other changes to an “unfair” and “inefficient” tax system. It also warned that restricting income tax relief on pension contributions “should be avoided” and repeated its cautions against an annual wealth tax, which it says would penalise savers, or increasing stamp duty.

Among the options for the Chancellor, as set out, by the IFS are:

■ Ending capital gains tax relief on death, which allows for assets to be inherited without paying CGT on the increase in value over the deceased person's lifetime, to raise £2.3 billion in 2029/30.