For many years, the British public has expressed a preference for tax increases to occur discreetly rather than through transparent methods. This sentiment has influenced chancellors from Nigel Lawson onward, leading to an ongoing reliance on indirect taxation. Among these are stamp duty and capital gains tax, both of which have the effect of discouraging property transactions while serving as alternatives to a more straightforward annual wealth tax that some economists advocate.
Rachel Reeves is expected to follow in the footsteps of previous chancellors as she prepares to present her second budget on November 26. Recently, it became known that plans to increase income tax rates have been set aside. Instead, there is speculation that Reeves will opt for stealth taxes to generate revenue, potentially allowing her to adhere to a manifesto commitment that avoids raising major tax categories.
Despite the current fiscal challenges faced by the country, which Reeves has acknowledged, there remains a concern about public services and the impact of a weakened tax system influenced by previous Tory policies. Her recent speeches emphasize shared responsibility in addressing these issues, hinting at potential income tax increases and a comprehensive review of property taxes.
Critics within the Labour party have cautioned against breaking manifesto promises, fearing electoral repercussions. Historical context shows that previous administrations, such as those led by Norman Lamont and George Osborne, have implemented stealth taxes as necessary measures during difficult financial periods, albeit often followed by political pushback.
Current proposals to reform council tax may be abandoned in favor of minor adjustments to existing structures, potentially complicating tax systems rather than simplifying them. As the electorate ages, there is concern that many voters are inclined to retreat to an idealized past, which could undermine efforts for establishing a coherent and equitable taxation system. The hope that recent Labour leadership would pave the way for a more effective policy approach appears to be diminishing.
Source: https://www.theguardian.com/uk-news/2025/nov/15/rachel-reeves-keir-starmer-stealth-taxes-labour