Rachel Reeves is set to batter ordinary workers and the South East at the Budget – as she pumps up benefits by £15billion a year.
The Chancellor is putting the final touches to another grim package, despite promising just a year ago that she would not be back for more taxes.
Ms Reeves is expected to order a council tax revaluation of Band F, G and H properties in England on Wednesday, potentially punishing residents where properties have risen sharply.
Homes worth more than £2million – mostly in London – face an extra ‘mansion tax’ levy as the government bows to Labour demands to milk the ‘wealthy’.
The overhaul comes despite then-Labour frontbencher Jon Ashworth vowing before the election: ‘We’re not changing council tax banding.’
Property guru Kirstie Allsopp today warned that the ‘performative’ plan would see more properties being valued at £1.99million by owners to avoid a tax ‘cliff edge’ at a time when the market is already ‘desperately in the doldrums’.
Meanwhile, Treasury sources have been all-but confirming that the hated freeze on tax thresholds will be kept in place for another two years.
That ‘stealth raid’ will raise billions of pounds by dragging millions of people deeper into the tax system.
Experts said that continuing the freeze amounted to Labour reneging on past promises not to increase taxes on working people.
Tory leader Kemi Badenoch used a speech to the CBI to warn that the Budget would see tax rises ‘dressed up as necessity’, adding: ‘They are not, we need to cut spending.’
For the first time, the state pension would be above the tax threshold – so the government will give with one hand and take with the other.
Ms Reeves is also targeting the ‘salary-sacrifice’ schemes used by millions of private-sector workers for their pensions, bringing in around £3billion.
The move echoes Gordon Brown’s infamous pensions raid during the last Labour government. Experts warned it would deal a hammer blow to private-sector pensions, which already lag far behind the gold-plated arrangements for those in the public sector.
Ms Reeves is struggling to fill a black hole in the books thought to run into tens of billions of pounds.
She has blamed everything from OBR productivity downgrades to Brexit and Donald Trump for her woes.
The Treasury watchdog is said to have revised down growth for every year of the forecast compared to March.
But businesses have accused Labour of crushing growth with the last brutal Budget raid – the biggest tax-raiser on record.
And critics point out that Ms Reeves is also splurging huge sums on handouts.
She is expected to scrap the two-child benefit cap at a cost of around £3billion a year, and uprate handouts by nearly 4 per cent from April.
Ms Reeves has already abandoned hope of curbing the spiralling benefits bill after a Labour revolt earlier this year. She must also fund the cost of another climbdown on winter fuel allowance cuts.
Together those policies are estimated to add around £15billion a year to the benefits bill.
Just a year ago Ms Reeves told the CBI conference that she would not be increasing taxes again after that.
Properties in England are currently put into bands based on their values from 1991, after successive governments shied away from revaluations.
But the surge in prices in London and the South East means that under a new system many could move upwards dramatically.
Labour could argue that because the typical Band D property is not affected they are protecting ‘working people’.
However, huge numbers of people who have stretched themselves for modest properties in the South East, as well as pensioners on fixed incomes, could be in for a shock.
Some 2.4million properties were in Band F, G and H as of this year.
The Treasury refused to comment on ‘speculation’ ahead of the Budget.
But one government source said they believed the claims of a revaluation were ‘broadly right’.
Touring broadcast studios this morning, Business Secretary Peter Kyle apologised for the rumours swirling around the contents of the Budget.
Alarm has been raised that the chaotic run-up – including an extraordinary U-turn on whether income tax will rise – has smashed confidence and slowed the economy.
He told Times Radio: ‘I’m not apologising on behalf of the people who are reporting on the speculation, because that would be absurd.
‘What I can apologise for is the fact that there has been so much speculation. I understand that it’s a distraction, but it is speculation and the reporting of such.
‘I’m here to talk about the facts of the economy right now. And the facts are that we are delivering schemes that are lowering the cost of energy for business in this country, we are delivering an industrial strategy, delivering stability in policymaking for 10 years into the future.
‘We have got a grip on the interest rates and the inflation challenges.’
He later told the CBI conference that the Uk was suffering from a ‘growth emergency’, adding: ‘We will be in it for as long as we are unable to get our way out of this situation without increased economic productivity.’
