Rachel Reeves, the Labour Chancellor, faces a major challenge in balancing the budget due to Labour's commitment not to raise the four main taxes: income tax, national insurance, VAT, and corporation tax.

According to the Institute for Fiscal Studies (IFS), these constraints account for 75% of all revenues and will limit her ability to generate necessary funds.

The IFS suggests that increasing capital gains tax, inheritance tax, and stamp duty on property sales might become necessary, although these could be economically damaging in the short term.

The previous government had already raised tax revenues to the highest level since the 1940s while cutting public investment and services.

The national debt, now at its highest since the 1960s, further compounds the financial difficulties.

Increasing council tax on higher-value properties, mimicking Scotland's example, is one potential solution proposed by the IFS.

Changes to inheritance tax could also add £2 billion annually.

Conversely, the IFS advises against raising stamp duty, citing negative economic impacts.

The IFS emphasizes that reforming taxes on pensions, capital gains, and inheritances could lead to a fairer and more efficient tax system.