Labour’s tax red lines have left Reeves with ‘one hand tied’ for budget, says IFS

Ruling out of rises to four main taxes could lead chancellor to make ‘economically damaging’ decisions, says thinktank

Rachel Reeves has “one hand tied behind her back” as she considers how to balance the books next month in her first budget, a leading economic thinktank has said, after she ruled out increases to the four main taxes that account for 75% of all revenues.

The Institute for Fiscal Studies (IFS) said Labour had promised not to raise income tax, national insurance, VAT or corporation tax before the budget, heightening speculation that Reeves will seek to increase revenues from rises in capital gains tax, inheritance tax and stamp duty on property sales.