Rachel Reeves given tax warning over manifesto pledge

• Rachel Reeves has been warned by leading economists that Labour's current strategy of introducing small new taxes, such as a mansion tax or gambling levy, will be insufficient to address a significant budget deficit.
• Economists, including Lord Jim O’Neill and the National Institute of Economic and Social Research (NIESR), estimate a £41.2 billion black hole in the autumn Budget, necessitating more substantial revenue generation.
• To meet spending plans and fiscal rules, Ms Reeves may be forced to break Labour’s manifesto pledge by increasing income tax, VAT, or employee national insurance.
• Proposed smaller taxes like a mansion tax, a landlord national insurance contribution, and a gambling tax are considered insufficient to fill the budget gap and face criticisms regarding their effectiveness and potential negative impacts.
• The UK's economic vulnerability, exacerbated by global conflicts, tariffs imposed by Donald Trump, and rising gilt market costs, contributes to the pressure on public finances.

IN FULL

Reeves warned she will have to break manifesto commitment on tax to deal with economic black hole