Speculation around potential tax rises in the coming UK Budget has gone into overdrive. The latest reports suggest Chancellor Rachel Reeves may be considering everything from an exit tax on wealthy people fleeing the country to a raid on high-value properties. Revenue-raising measures will be needed at the fiscal event on November 26 to plug what could now be a ￡30bn hole in the public finances. But the swirl of rumours about higher levies is all the more unsettling for taxpayers and investors because much less has been announced on how the Labour government plans to restrain spending, and in turn reduce the need for future tax rises.

One of the biggest tests lies in tackling welfare spending, particularly outlays on ill health and disability. Although Britain’s non-pensioner benefit spending is forecast to remain just above 4.5 per cent of GDP in the medium term, a rising share is expected to go towards personal independence payments. These support individuals with health conditions or disabilities regardless of their employment status, and are set to rise by over ￡12bn by 2030. An ageing population and higher sickness plays a part, but so do flaws in how they are administered.

The government’s welfare bill aimed to tighten the eligibility criteria for PIPs, but a backbench rebellion forced a U-turn in the summer, wiping out around ￡5bn in potential savings. The episode should not be an excuse to slow reform. Last week, the government launched the year-long Timms Review into the health benefits. It should be ambitious in identifying savings. This includes ensuring that entitlements are more accurately graded according to the additional costs individuals face due to their illness, particularly for mental health issues, which have soared since the pandemic.