Five unthinkable taxes Rachel Reeves may hike to plug Labour's black hole

Labour's disability benefits U-turn has blown a £3billion hole in her plans, possibly more. That's on top of the £1.5billion cost of reinstating winter fuel payments. PM Keir Starmer has promised to spend more on defence too. And her second autumn Budget is just over three months away.

Before the benefits debacle, experts warned she'd need to raise up to £24billion to keep the show on the road. Now that figure could be even higher. Ben Caswell, senior economist at the National Institute of Economic and Social Research, is the latest to say Reeves has little choice.

The nation's finances were already on a knife edge, as Reeves repeatedly blows through her fiscal headroom.

With the economy shrinking in April, and the Bank of England telling her there's no growth, it can only get worse.

Labour's manifesto rules out tax hikes on working people, but Reeves has already blown through that. Now she'll be thinking the unthinkable. Again.

So which taxes will Reeves hit? Here are five we never thought we'd see. But now we may.

1. Income tax freeze extended. This one's no longer unthinkable. In fact, it's almost unthinkable it won't happen.

Freezing thresholds for six years to 2028 has dragged millions into higher tax bands, raising £38billion. Adding another two years to 2030 would haul in £10billion more. Pensioners are being hammered by this. So is everyone else.

Reeves could go further. Cutting the 45% income tax threshold from £125,140 to £100,000 would raise billions more from top earners. It's a clear manifesto breach but Reeves will pretend it isn't.

That may be a step too far, but the 2030 freeze looks baked in.

2. Double pension tax raid. The Treasury has dreamed of slashing pension tax relief for years. It's always had second thoughts, but this may be its chance.

A flat 25% rate of tax relief for all pension savers would hit 40% and 45% taxpayers, while giving more support to those on the basic rate.

Reeves could even cite this as a blow for equality.

There's also talk she could cut the 25% pension tax-free lump sum from £268,275 to £100,000. Or even £75,000.

That would save billions. Pension salary sacrifice schemes may also be chopped.

These changes would hit the better-off hardest, which might appeal to Labour rebels. But savers won't forget being fleeced. Or forgive.

3. Capital gains tax on your home. This one really is unthinkable, but not impossible. Hitting homeowners with capital gains tax on main residences would be political suicide. But that doesn't mean Reeves won't be tempted.

She'll probably restrict herself to other options, like hiking the higher rate of CGT from 24% to 40% or 45%, in line with income tax.

Alternatively, she could scrap the rule that wipes out any CGT bill on death. In future, families could pay both CGT and inheritance tax on the same asset. The Treasury's always looking for ways to tax wealth, without calling it a wealth tax.

4. Fuel duty hike. Raising fuel duty has been off limits since 2011. No chancellor dared touch it.

The 5p "temporary" cut for petrol and diesel drivers is set to expire next March. Reeves could quietly let it lapse, or sneak in another 5p on top. That would mean 10p more per litre raising £4billion a year, enough to cover much of the welfare U-turn.

Motorists won't like it. But falling petrol prices may give her cover to squeeze this one through.

5. ISA allowance. For months, Reeves has been rumoured to be cutting the £20,000 Cash ISA limit to £10,000 or even £4,000. This would hit savers hard, but save the Treasury a tidy sum.

The argument goes that more money would be channelled into stocks and shares, boosting long-term growth. But for cautious savers, especially older ones, it would feel like a penalty for doing the right thing.

Reeves could even revive the idea of a £100,000 lifetime ISA cap. Once unthinkable, now not impossible. No tax hike is, under this Chancellor, and this Government.