Will Rachel Reeves raise taxes in the autumn Budget? Yes. While most of the spending review is covered, as she claims, by the tax rises she brought in last year, and some changes to the fiscal rules that make it easier for her to borrow to invest, her new headache is how to pay for Labour’s sudden new mission to eradicate child poverty.
Restoring most of the pensioners’ winter fuel payment hardly counts in the big scheme of things – £1bn either way is a rounding error. But added to the cost of free school meals, the probable ending of the two-child cap on child benefit, and other previously unaccounted measures would cost more – some £5bn to £10bn a year. That would consume most of Reeves’s fiscal headroom, which is far too thin in any case.
