Labour accused of plotting ‘eye-watering tax increases’ Analysis of Labour party spending pledges suggests households would have to pay an additional £2,138 per year if they were paid through general taxation. Labour leader Sir Keir Starmer and Rachel Reeves, the shadow chancellor, have promised £94bn in spending so far and with experts claiming any government would need to hike taxes to “just to stand still” in the coming years, the tax burden under Labour could rocket to pay for all of their plans. Ms Reeves and Sir Keir have previously backed increases to inheritance tax; a new lifetime gift tax; cutting the annual capital gains allowance and introducing a 50p income tax band for earnings over £125,000. Commenting on extra taxes on wealth, Paul Johnson, the director of the independent Institute for Fiscal Studies, says: “When people talk about higher tax on higher incomes, they don’t tend to take into account the fact that the last decade has already seen big tax increases on people on high incomes. The fact that the threshold at which you start to pay higher rates of income tax has not gone up means that more and more people have been dragged into the higher tax bands, and huge cuts in pension tax relief have people at the top.”