The favourite fiscal trick of Gordon Brown to increase state spending and control is now set to make a comeback on steroids.
Rachel Reeves is on a mission to raid the pockets of workers, the bank accounts of pensioners and the tills of the nation’s businesses to prop up a ballooning Government.
Her announcements in July – taking away the Winter Fuel Payment and scrapping the social care cost cap to pay for inflation-busting public sector pay rises and to cancel planned reductions in the size of the civil service – were just a small taste of what’s to come.
With Labour readily backing down to trade union pay demands, pledging higher public spending and ministers boasting this week of their plans to impose new burdens on businesses, hard-working British taxpayers will be paying the price for years to come.
It was quite telling of what is to come in Government-trade union relations that while she was on her feet bragging about spending more on public sector pay to resolve disputes, nurses rejected a 5.5% pay offer.
Labour’s commitments on growing the public sector, decisions like those on train driver pay and the risk of greater pay rises to appease trade union demands will bake in tens of billions of pounds of higher public spending in each and every year.
To pay for those bills, the Chancellor will need to embark on a great stealth tax raid, and no one will be spared the pain.
With Labour’s war on the motorist and dogmatic approach to climate change, we can expect to see Fuel Duties rise for the first time in 13 years, Vehicle Excise Duty going up, hikes in Air Passenger Duty and businesses hit with the Climate Change Levy increasing.
Given the assault we’ve already seen on Britain’s pensioners and attacks on aspiration, Inheritance Tax rises are likely, alongside hikes in Capital Gains Taxes and Stamp Duty.
Businesses could also see rises in Business Rates while the hospitality sector will be hit with higher Alcohol Duties.
Worryingly, hard-working families and pensioners across Britain could see their Council Tax bills rise exponentially as Labour shunt costs onto local authorities. When they were last in power, Council Tax bills more than doubled across the country.
The Chancellor’s refusal to comment on the future of Council Tax bands, various discounts and exemptions, and the referendum limit will cause uncertainty and fear to millions.
As well as her stealth tax plans, the Chancellor has demeaned her office and put economic growth at risk by playing politics with the nation’s finances.
Her relentless talking down of the British economy and the unfounded claims of a £22bn blackhole to score cheap political points have had real and expensive impacts on our economy.
Consumer and investor confidence is down as the Chancellor continues to act like an opposition politician than a holder of one of the Great Offices of State.
Governments always face economic challenges, but skilful, astute and effective Chancellors know when to intervene and when to unlock supply side and fiscal measures to boost growth.
They also promote Britain and put optimism at the heart of their policies, even when making difficult decisions.
In my lifetime I’ve seen Geoffrey Howe, Nigel Lawson and Ken Clarke make the right decisions to boost economic freedoms and deliver sound management of the public finances.
I also had the privilege of working as a Treasury Minister with George Osborne as he brought down the deficit inherited from the last Labour Government and put in place a Long Term Economic Plan and delivered economic security, higher wages and lower taxes.
What we see with the current Labour Government and heard from Chancellor’s speech was not an optimistic vision for the future, but a return to big state socialism and the threat of billions of pounds being taken in stealth taxes from families and business for years to come.
