ALEX BRUMMER: What Labour isn’t telling before election

Keir Starmer and Rachel Reeves are borrowing heavily from the Blair-Brown playbook in the run-up to the next general election.

They want no dealings with Jeremy Corbyn’s ‘magic money tree’ or the late John Smith’s flawed tax rise budget plans from three decades ago. The message is: no taxes on wealth, Britain pays enough taxes.

The revenue raisers on the agenda may be anti-business, but they are limited in scope. Ending non-domiciled tax status will produce perhaps £3bn. In time, this could easily be overcome by the non-dominants moving to Monaco.

Profits from closing the unexpected tax loopholes on North Sea oil will depend largely on a rise in the price of oil and, if this drives drillers to lower-cost locations in Africa, it could end up being a net loser. .

Reducing the £1m pension savings limit is a gesture policy. No one really knows what the Labor Party has up its sleeve if it really wants to reform the UK public sector and turn Britain into a clean energy superpower. What we learn from the past is that the Labor Party will not reveal its money-raising plans before the election.

In 1997, a cabal consisting of Gordon Brown, Ed Balls, parliamentary businessman Geoffrey Robinson and the now-defunct Arthur Andersen audit firm spent weeks holed up in a Dorchester Hotel suite planning tax raids to pay off election promises.

Billions would be raised by abolishing the right of defined benefit pension plans to receive tax-free dividends. A second goal was to tax the windfall profits of newly privatized energy companies. It wouldn’t be surprising if Rachel Reeves and her team weren’t working with tax experts to identify the equivalent of the 1997 raids.

The context is not as favorable as it was for Brown-Blair due to the sorry state of public finances post-pandemic and Russia’s war against Ukraine. Tax revenues at 37 percent of national income are at the highest level since the 1940s.

But there are many ways a shrewd Chancellor can increase his income. The explosion of self-employed contractors in the UK has been partly due to advantageous tax treatment. The Conservatives’ freezing of thresholds, pushing increasing numbers of workers into higher ranks, has made the system even more inequitable for those who have no choice but PAYE.

The UK’s VAT system could also deliver big benefits. The Institute for Fiscal Studies maintains that up to £100 billion is being lost due to loopholes and exceptions that have emerged. But the politician who attacks the privileges of national newspapers, which are exempt from VAT, will do so at his own risk!

The biggest, boldest and perhaps most controversial treasure for an incoming Chancellor would be a new property tax, to displace council tax and stamp duty, which would capture capital gains from rising residential values, on a annual basis. That would almost certainly be a step too far for a Labor Party planning to serve more than one term in a property-owning democracy.

We should not be fooled into thinking that the Labor Party does not have some respites up its sleeve. The Brown-Blair manual tells us that the fiscal policies missing from the manifesto are more critical than those previously announced.