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Rachel Reeves was plotting another tax raid on the middle-classes last night – despite warnings she needs to cut state spending to stop the economy 'spiralling out of control'. Shock figures yesterday showed that families and businesses are paying record amounts of tax after the Chancellor's first year in office. They also revealed that even this is not enough to cover the cost of Labour's vast expansion of the state, pushing Government borrowing to a record high outside of the pandemic, with the national debt hitting £2.9trillion. Last night, it emerged that the Chancellor is considering a £2billion raid on middle-class professionals such as lawyers, accountants and family doctors as she scrambles to balance the books in next month's Budget. With inflation figures this morning expected to bring more gloom, Ms Reeves yesterday conceded that the economy is 'not working as it should' but attempted to blame Brexit. Business Secretary Peter Kyle defended Labour's spending splurge, saying: 'We are doing what it takes to invest our way out of the challenge we inherited from the Tory government.' But Tory leader Kemi Badenoch said borrowing figures showed the economy was 'spiralling out of control', while Shadow Chancellor Sir Mel Stride added: 'If Rachel Reeves had a plan – or a backbone – she would stand up to her backbenchers, get spending under control and cut the deficit. 'Instead she is plotting to hike taxes yet again to pay for her failures.' The Treasury did not dispute reports last night that she is eyeing a new charge on people who use limited liability partnerships as she attempts to fill a black hole in the public finances estimated at £30billion. Almost 200,000 people who use partnerships do not pay employer's national insurance. Ending the system could generate £2billion a year but would deliver a heavy blow to thousands of well-paid middle-class professionals. A solicitor drawing the average £316,000 a year from a partnership would face an additional tax bill of £23,000. Ms Reeves is also considering further taxes on the better-off, including an annual levy on the most expensive homes or subjecting them to capital gains tax. But a new report today urges her to focus instead on slashing spending. The study by the Policy Exchange think-tank sets out plans to cut spending by £115billion a year, including freezing benefits, slashing foreign aid and ending the pension triple lock. Figures from the Office for National Statistics yesterday showed tax receipts of £523.7billion in the first six months of the fiscal year, £36.9billion higher than the same period last year. But this record haul was dwarfed by £623.1billion of spending. The gaping hole was filled by yet more borrowing – close to £100billion between April and September – pushing national debt to £2.9trillion.
