Chancellor Rachel Reeves has been warned that any tax hikes must soon be rescinded if she breaks a key Labour manifesto promise and further increases the tax burden on Britons.

On Tuesday, Ms Reeves opened the door to potential tax rises in a speech where she pledged to make “the choices necessary to deliver strong foundations for the economy” in response to an environment that had “thrown more challenges our way”.

In the unprecedented pre-Budget press conference, she advised that: “We will all have to contribute”.

As an increase in the tax burden looms, the Tony Blair Institute for Global Change (TBI) has issued a stark piece of advice to the embattled Chancellor.

The group, the namesake of Britain’s longest-serving Labour Prime Minister, advised Ms Reeves that new measures should only be a temporary adjustment.

“If the Chancellor opts for a larger revenue-raising step – particularly a manifesto-breaching increase in income tax or value-added tax (VAT) – she should make clear that it is temporary and conditional: a short-term measure to stabilise the public finances, not a permanent shift in direction.”

In their advice, the think tank told Ms Reeves that she must pair any tax rises must be linked with growth-promoting, pro-business reforms.

They then suggest the Chancellor should switch to “targeted tax cuts” ahead of the next election, “once growth strengthens and public service reforms deliver results”.

TBI stressed the importance of winning back the businesses that had been “bruised” by last year’s Budget.

They call on the Chancellor to bring the firms “back onside” with measures that over and beyond “the caution of the Government’s first year in office”.

The Tony Blair Institute’s director of economic policy, Tom Smith, explained: “The chancellor acknowledges she has tough choices to make. She cannot satisfy the markets, the party, business and voters all at once.

“The only way to do so over time is to put Britain back on the path to growth – and that means a new bargain between Government and business.“

“A credible Budget can’t just raise taxes – it must raise Britain’s sights. The Government needs to show fiscal discipline, but also the confidence to back business,” he added.

LATEST DEVELOPMENTS:

• David Lammy REFUSED Commons grilling on accidental prisoner release due to ‘career suicide’ fears
• Humza Yousaf compares modern ‘Islamophobia’ to 1930s Germany and issues call to ‘mobilise’
• Pay-per-mile car taxes to impact millions of drivers as Rachel Reeves plots ‘war on motorists’

As well as advising the Chancellor on her upcoming budget, the think tank also issued a warning over changes to Britain’s immigration policies.

Contrary to the direction of the Government, they suggested a liberalisation of migration laws to avoid damaging the UK’s flexible jobs market.

The Tony Blair Institute urged ministers to scrap plans to extend to requirements for permanent settlement for those on skilled worker visas.

They suggest retaining the current five-year route, as opposed to the 10 years currently being considered.

The think tank also advises further liberalisation of access to global talent visas.

In their paper, TBI proposes introducing a “tech excellence” visa for engineers, founders, and researchers.

They also called for the creation of a permanent key worker visa for shortage professions, such as construction and care.

Our Standards:
The GB News Editorial Charter