Reeves looking at 'sin taxes' to balance books

RACHEL Reeves is set to hit consumers with extra “sin taxes”, leading forecasters have predicted, which are widely seen as a regressive hit on people with lower incomes.

- By Mauricio Alencar

The Chancellor faces having to raise £20billion in the Budget to restore her “already paltry” margin of £9.9bn in headroom, says Pantheon Macroenomics.

Its UK economists Robert Wood and Elliott Jordan-Doak said the costs incurred from U-turns on welfare savings, and lower tax receipts than expected, could erode her fiscal buffer.

They said Reeves could look to “sin taxes”, which could include adding levies on gambling and junk food, to rebuild her buffer, while a “stealth tax” by extending a freeze on income tax thresholds could help her fill an estimated £13bn fiscal hole.