Think tank proposes £6bn tax package affecting pensioners and landlords
The Resolution Foundation has proposed a package of tax rises that it says could raise about £6 billion, including measures affecting pensioners, landlords and other groups, to help shore up the UK’s public finances. It argues the Chancellor’s room to meet fiscal rules has narrowed sharply, while extra spending is needed for defence and help with living costs.
The report says budget headroom has fallen from £24 billion to £12 billion amid economic turmoil linked to conflict in the Middle East and higher borrowing costs. Proposals include a 2p rise in income tax alongside a 2p cut in National Insurance, changes to capital gains tax and VAT thresholds, and National Insurance on partnership income; it also recommends targeted energy-bill and housing support. The Foundation says benefit cuts should not be rushed, arguing there is little scope to reduce welfare spending without harming living standards.
- Resolution Foundation proposes tax rises to raise about £6bn.
- It says the Chancellor’s fiscal headroom has halved to £12bn.
- The report recommends targeted support and cautions against rushed benefit cuts.
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The Resolution Foundation is a research organisation that analyses economic policy. It has released a report proposing tax rises that could raise about £6 billion because the government has much less money available for new spending than previously. Recent economic troubles linked to Middle East conflict and higher borrowing costs have worsened the situation significantly.
The proposals would affect various groups including pensioners and landlords, involving changes to income tax, National Insurance and capital gains tax. The Foundation argues that whilst tax rises are necessary, the government should not rush to cut welfare benefits, as this would damage living standards. Defence and support for people struggling with living costs have created competing demands on the government's budget.
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The case for
Those supporting the proposals argue that fiscal constraints leave limited room for manoeuvre, particularly given legitimate spending pressures on defence and cost-of-living support. Targeted tax rises on groups with greater capacity to pay—such as higher-income tax adjustments and property-related levies—offer a more progressive alternative to welfare cuts that would harm vulnerable households. The think tank's analysis suggests these measures could stabilise public finances without the cascading harms of benefit reductions.
The case against
Those opposing contend that tax rises risk dampening economic growth, potentially undermining the revenue gains claimed. They argue that pensioners face mounting expenses themselves and have already contributed significantly through pension changes, whilst landlords operate in an increasingly regulated environment and reduced investment in rental housing could exacerbate supply shortages. Rather than raising taxes, this perspective holds that governments should prioritise strict spending discipline and efficiency gains, which could achieve fiscal consolidation without the economic drag of higher levies.
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Originally published by Daily Mail as “Labour’s favourite think-tank backs £6bn tax raid on pensioners and landlords to fill ‘huge hole’ in public finances”.