IFS warns Rachel Reeves against ‘half-baked dash for revenue’
Rachel Reeves must avoid “a half-baked dash for revenue” or risk damaging economic growth as the chancellor seeks to close a large gap in next month’s budget, the Institute for Fiscal Studies has said.The tax and spending thinktank has warned there was a danger the chancellor would create “unnecessary economic damage” if she chooses to stitch together unrelated tax-raising measures to cut the shortfall in government revenues and keep within her fiscal rules.In a chapter from a report due to be published later this month, the IFS said Reeves could raise tens of billions of pounds in extra revenue without breaking Labour’s manifesto pledges, but cautioned that higher rates on longstanding, poorly designed taxes would have a detrimental effect on incentives to work, productivity and economic growth.“A budget focused purely on the politics could prove considerably worse on the economics,” the thinktank said.Reeves has ruled out increases in income tax, national insurance and VAT before the budget next month, which is being viewed as a make-or-break reset for the government after a torrid first 15 months in office.
While there is potential to close the budget gap with spending cuts or higher borrowing, the chancellor has come under pressure to avoid using them to improve the UK’s financial position,Rebel Labour MPs have forced the government to backtrack on spending cuts, most recently reductions in universal credit payments,Meanwhile, the interest rate on government borrowing has remained high this year, deterring the chancellor from increasing debt levels,Treasury officials are understood to be considering several tax-raising options in an effort to close a spending gap of £20bn to £30bn,Adding to the need for higher tax receipts, Reeves is keen to double a near £10bn budget buffer to about £20bn to allow for greater flexibility when the public finances come under pressure.
Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionThe IFS said the UK was “in a fiscal bind” but could raise significant funds by adopting far-reaching reforms to taxes on savings and investment income, such as rental income, dividend income, interest income, self-employment profits or capital gains.Analysis by IFS researchers for a chapter of the IFS Green Budget shows an increase in the tax on pensions, including levying national insurance on employer pension contributions and limits on the ability of retirees to access 25% of their savings tax-free, could raise billions of pounds.“Employer [national insurance contributions] could be levied in full on all employer pension contributions, and replaced with a 10% subsidy on all employer pension contributions.This would raise around £6bn a year,” the report said.The report said there was also a potential windfall of £10bn from closing a tax gap that had opened up in recent years.
It said small businesses were paying only 40% of the tax they owed.“In 2029–30 terms, a corporation tax gap of that size would represent more than £24bn of forgone revenue; just returning the gap to 2017–18 levels could raise more than £10bn,” it said.Isaac Delestre, a senior research economist at IFS and an author of the chapter, said: “Revenue-raising seems likely to be a major goal of the coming budget.But if Rachel Reeves limits her ambition to collecting more revenue, she will have fallen short.“Almost any package of tax rises is likely to weigh on growth, but by tackling some of the inefficiency and unfairness in our existing tax system, the chancellor could limit the economic damage.
The last thing we need in November is directionless tinkering and half-baked fixes,” he said,
Helen Goh’s recipe for pumpkin cheesecake with maple pecan brittle | The sweet spot
Silky, spiced and just sweet enough, this pumpkin cheesecake is a celebration of autumnal comfort. I’m not a fan of tinned pumpkin – it’s watery and flat-tasting – so I’ve taken the extra step of roasting some butternut or Kent squash; the oven’s heat coaxes out its natural sweetness while evaporating excess moisture, resulting in a smooth, flavourful puree that gives the cheesecake real depth. The maple pecan brittle provides the final flourish: golden, nutty and with just the right amount of crunch to offset the cheesecake’s creamy softness.To make 200g pumpkin puree, chop 350-400g peeled, deseeded pumpkin into chunks, then roast, loosely covered, at 200C (180C fan)/390F/gas 6 until soft but not browned. Puree in a high-speed blender
Melbourne bar ranked best in Australasia and 19 in world
For close followers of the annual World’s 50 Best Bars accolade, it’ll come as little surprise to see Melbourne’s Caretaker’s Cottage and Sydney’s Maybe Sammy recognised.For the second year running, Caretaker’s Cottage has been named Best Bar in Australasia, coming in at number 19 globally on the awards list, announced at an event in Hong Kong on 8 October.Coming in at first place on the global list was Hong Kong’s Bar Leone, with Mexico City’s Handshake Speakeasy at number two and Barcelona’s Sips in third place.Since opening in 2022, Caretaker’s Cottage, which calls itself “probably Victoria’s smallest pub” has “become a must-visit for locals and travellers alike”, says the list’s website. Owners Matt Stirling, Ryan Nordics and Rob Libecans said they were “blown away” by the news they’d ranked highest in the region in 2024
Why bag-in-box wines are here to stay | Hannah Crosbie on drinks
Slap the bag? The wheel of goon? Or, perhaps, goon of fortune? If any of those collections of words mean anything to you (keep your double entendres to yourself, please), you may have fuzzy yet painful memories of bag-in-box wine. The cheapness and the format – not to mention the sheer volume you can buy it for – makes bag-in-box ripe for drinking games.The Guardian’s journalism is independent. We will earn a commission if you buy something through an affiliate link. Learn more
Rachel Roddy’s recipe for red peppers stuffed with orzo, tuna, capers and herbs | A kitchen in Rome
Just beyond the hard rush of Viale Marconi, in the quieter Via Gerolamo Cardano, is a popular bakery called Albanesi il forno delle meraviglie, meaning “the oven [or bakery] of wonders”. Established in 1959 by Aldo Albanesi, and now run by his sons Adriano and Alessandro, Albanesi is wondrous also for its size. Behind an 11-window shopfront lies almost 500 sq m of shop floor, and a small maze of laboratories in which almost everything that can be made is made: bread, pizza, pies, cakes, biscuits, fresh egg pasta, sauces, baked pasta and other dishes that are ready to eat. The snake of glass-fronted counters also hold cheese, other dairy products, cured meats, and vegetables and olives preserved in various ways, while the shelves are packed with everyday provisions of good and practical quality. This is a shop with something for everyone
Strong flat white for Batman: should I use a ‘coffee name’?
“What’s your name?” When people misspell it as “kangaroo”, the answer isn’t so straightforward.That’s why Kantaro Okada goes by “Ken” or “K” when grabbing takeaway. The operator of various Melbourne cafes (279, Le Bajo Milkbar) isn’t alone in disguising his identity. “Everyone has a coffee name at our office,” he says. “Because they have Japanese names
How to turn outer lettuce leaves into mayonnaise – recipe
Wildair in New York is a groundbreaking restaurant that has deeply influenced my cooking. It opened in 2015 as a sister to the now closed Contra, an impeccable fine-dining restaurant, and the same precision and ingenuity was applied to Wildair’s dishes, which have that perfect balance of elevated refinement and skilled execution, all combined with a casual playfulness. You can probably imagine my excitement, then, when I found out that one of my favourite dishes from one of my favourite restaurants also just happened to save waste by making an emulsion from the outer leaves of little gem lettuce cooked in butter. Pure genius.Only I would say this, but finding a use for the outer leaves of a lettuce has always niggled me
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