Former Blair adviser calls for higher taxes on fuel and alcohol

Rachel Reeves should increase fuel and alcohol taxes in her budget to help fund a “decade of innovation” in public services, a former Number 10 adviser has said.

The chancellor could also raise billions of pounds for spending on building new social housing by taxing vacant properties, foreign ownership and home exchanges, says Theo Bertram, director of the Social Market Foundation think tank.

Faced with a tight outlook for public finances, Ms Reeves is expected to announce a change to her own budget rules to allow for more borrowing to free up spending on infrastructure projects, on top of further tax rises to finance the £22 billion black hole that has been left behind by the state finances. Conservatives.

But in an article for iMr Bertram said the Government could deliver on its promises to tackle poverty and improve living standards and public services with a series of tax increases that would free up money for long-term improvements to the NHS and housing.

He said: “The budget is not just an opportunity to talk about how Starmer’s government will work, but to tell this story of renewal. It should be a story not only about the Chancellor’s prudence, but also about the Prime Minister’s purpose.”

Mr Bertram, a Downing Street adviser to both Tony Blair and Gordon Brown during the last Labor government, said that since 2010 successive chancellors had lost almost £130 billion in fuel duty revenue by cutting or freezing the levy and that it increasing it would be a shame. “test of the seriousness of Starmer’s long-term credentials”.

He added: “If, instead of cutting fuel duty, the government had invested in bus and rail, it would have reduced traffic congestion, improved health and done more to reduce the cost of living for more working families .”

The October 30 Budget should also increase taxes on cheap alcohol to reduce pressure on A&E and reduce crime, as well as increase levies on online slot machines, Mr Bertram said. .

Taxes on vacant properties, foreign ownership and house flipping in Britain could raise as much as £4 billion in revenue, which could be spent on tripling construction to more than 30,000 social homes a year.

“These are short-term pains for those who can afford them, for the sake of long-term gains for the country,” Bertram said.

He added: “Labour’s first 100 days have not gone as well as Number 10 had hoped. The worst thing they could do at this stage would be to fall back on the short-term, public-friendly gimmicks that have characterized recent budgets.

“This Budget is an opportunity for Reeves to show how – and crucially for Starmer to explain why – Labor is committed to a decade of renewal.”

The question for Keir Starmer is: ‘Why are you Prime Minister?‘

“Why are you Prime Minister?” Gordon Brown is momentarily stunned. I don’t know if he’s offended, or really struggling to find an answer. But they will soon be the Prime Minister’s questions, and he needs to get better at telling his story. He’s great at defending the way his government’s policies worked – all the details, the numbers, the facts – but the secret to winning PMQs in the long run is knowing why, not how.

Over time, two things have answered this question for Gordon. First, the financial crisis gave him clarity about his purpose: he was on a mission to save the economy. Secondly, his values: no matter how chaotic Number 10 could be or how tough the economic conditions, you knew Gordon stood for tackling child poverty, both at home and abroad.

After a painfully short honeymoon, it is a question many in Westminster are now asking Keir Starmer. Why are you Prime Minister?

I think the answer lies in convincing people to join the decade of innovation. Convince them that not only has the color of government changed, but that Britain will work for them again.

Wes Streeting told me that what drives Starmer is the determination to end the “band-aid politics… where you end up being incredibly short-sighted and the country ends up paying a higher price because you are not prepared to take the right long view. ” term decisions.”

But long-term thinking can be politically risky. For many it feels like a process rather than values. And what if the public doesn’t feel the progress by the time the next election comes around? With support already falling in the polls, many Labor MPs are nervous about the direction they are heading.

The Budget is not only an opportunity to talk about how Starmer’s government will work, but also to tell this story of renewal. It should be a story not only about the Chancellor’s prudence, but also about the Prime Minister’s purpose.

Those who want the chancellor to lift children out of poverty are likely to be disappointed if they expect a quick fix, such as scrapping the cap on two child benefits.

Instead, the manifesto commits Labor to the long road of tackling poverty by delivering growth, and then better jobs, living standards and public services. But that solution is not immediate. Workers’ rights, British energy, reform of planning laws: the benefits of these measures will not be felt any time soon.

Recent budgets have been characterized by short-term giveaways. This may be more akin to the middle years of Margaret Thatcher and Tony Blair, when they earned their political success by engaging in debate rather than playing to the gallery.

The Social Market Foundation has developed a series of policy recommendations that align with this ‘decade of innovation’ approach.

Take fuel duty: since 2010, successive chancellors have lost almost £130 billion in expected revenues in the form of cuts and freezes. If, instead of cutting fuel taxes, the government had invested in bus and rail, it would have reduced traffic congestion, improved health and done more to lower the cost of living for more working families. Increasing fuel duty in this Budget is therefore a test of the seriousness of Starmer’s long-term credentials.

Another aim of the manifesto is to shift the NHS from expensive treatments to less expensive prevention. The Budget is an opportunity to demonstrate this commitment: increase taxes on cheap alcohol to reduce pressure on emergency departments and reduce crime; and increasing taxes on online slots – a booming post-lockdown industry that now causes a disproportionate amount of problem gambling.

There will be people who oppose these tax increases simply because they are tax increases. There will be those who will argue that this social harm is a price worth paying when we are in a cost-of-living crisis. But these arguments are short-termism and it is this short-term approach that perpetuates the cost of living crisis. These particular tax increases are also rare: popular.

Another aspect of the public domain that is in urgent need of long-term renewal is housing. The private sector alone is unlikely to achieve housing development targets, nor will it be able to deliver much-needed affordable housing. Social housing is the missing ingredient. Australia, Canada and New Zealand already tax behavior that negatively impacts citizens’ prospects of getting on the housing ladder.

Taxes on vacant properties, foreign ownership and house flipping in Britain could generate as much as £4 billion in revenue. This windfall from fairer taxes on housing could be translated into a tripling of construction to more than 30,000 social homes per year. These are short-term pains for those who can afford them, for the sake of long-term gains for the country.

Labour’s first 100 days have not gone as well as Number 10 had hoped. The worst thing they could do at this stage would be to fall back on the short-term, public-friendly gimmicks that have characterized recent budgets. This Budget is an opportunity for Reeves to show how – and crucially for Starmer to explain why – Labor is committed to a decade of renewal.

By Theo Bertram
Theo Bertram is director of the Social Market Foundation and former number 10 advisor