The news is full of proposed tax increases. The Government does this to spook you, before then making you feel grateful when not all of the tax increases come to pass.
Hunt will have to follow through on some of the Treasury ‘leaks’ on November 17. The Tories were running an ‘underlying’ budget deficit of about £15bn before Kami-Kwasi Kwarteng. Once he’d collapsed UK’s credibility in the bond markets, borrowing costs soared and now Hunt contemplates nearly £40bn of cuts to return borrowing to a level consistent with debt falling as a share of GDP in the medium term.

To put that figure in to perspective, the NHS’s yearly budget is £176bn; Defence is £48bn. The magnitude of George Osborne’s austerity programme was £110bn. What we are about to go through is a sequel to the Cameron/Osborne era. The cuts required may look lower, but bear in mind that pubic services were relatively well funded under Brown, and inflation was low. Another round of Tory austerity will be much harder than the first.
Attention inevitably moves to tax rises instead. The Conservatives have already pushed taxes to their highest level since the Second World War. Their decade of mismanagement means they will have to put them up even further, because they cannot risk the NHS and other public services collapsing. Their calculus is the public would never forgive them for that, but with taxes rises, the public believes Labour would put them up too. Indeed, a trap can be created for Labour. If Labour opposes tax rises, the Tories will say Labour voted against funding for the NHS – like they did with the now scrapped NI increase.
Labour shouldn’t have to play this game. The reason taxes have to go up is because the Tories have tanked the economy. But that causality will get lost in reporters’ desire to whittle every issue down to a binary question.

Labour should differentiate by which taxes it would raise instead. It has been mooted for years now that the taxes on capital should be equalised with those levied on work. Aligning Capital Gains Tax with Income Tax would bring in £14bn for the Treasury. A further £6bn a year would be raised if dividend income were taxed at the same rate as employment income.
The UK could follow the US and introduce taxes on share buy backs. FTSE 100 companies – particularly oil and gas ones – are generating so much cash from trading and other non-windfall tax revenues. A one per cent tax wouldn’t raise much, but would help incentivise companies to invest their profits instead of handing it to shareholders, thereby helping with the UK’s productivity problem.