The Rest Is Money 193. How Labour Could Have Avoided Tax Rises
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Jul 27, 2025 The discussion dives into whether political leaders should prioritize growth over manifesto commitments. It explores better EU trade negotiations to mitigate public finance black holes and potential tax increases. The conversation also highlights how small businesses are evading billions in taxes and the impacts of AI on retail. Additionally, the rise of cashless transactions is examined, revealing a staggering tax gap and the alarming rise of tax avoidance practices, urging vigilance among small business employers.
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Growth Drives Tax Revenue
- The biggest cause of the UK fiscal black hole is slow economic growth, not headline welfare policy reversals.
- Higher growth boosts tax revenues through increased spending, profits, and income, easing public finances.
Missed Growth from EU Deal
- A bolder EU trade deal akin to Theresa May's Chequers plan could have greatly improved UK growth.
- This would have averted the fiscal black hole and reduced or eliminated the need for tax rises.
Politics Hinder Better Deals
- Avoiding an ambitious EU trade deal means the government must raise unpopular taxes, which slows the economy.
- Public opinion increasingly regrets Brexit, so political backlash to a better deal may be less fierce than feared.