Rachel Reeves's spending plans are profoundly wrong – here's why

She did not, of course, use that language. Instead, she said she would operate within the fiscal rules set by Jeremy Hunt.

These require that she matches all government expenditure, excluding that on investment, with current taxation. Those rules also require that she reduces the so-called national debt as a proportion of GDP, or national income.

Simultaneously, she ruled out increasing taxes on wealth, or on income derived from it, or on those who enjoy high income whatever its source.

The result is that, whatever else she said, there is no hope of an increase in the quality of public services under Labour unless she is planning tax increases on those on lower pay.

This really matters. We know that public services are seriously underfunded. The SNP government in Scotland has done its best with the limited resources supplied to it by Westminster, but miracles are beyond their ability.

The result is that like the rest of the UK, Scotland is already seeing the harsh impact of austerity. In addition, even though the Scottish Government has been particularly good in trying to avoid the most penal elements of welfare reform imposed in England, poverty is also rising.

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I struggled to think of an appropriate word to describe Rachel Reeves’s approach when first writing about it this week, and the only one I could come up with was "depraved". It is not a word that I use too often. It means that something is morally corrupt, or wicked. That is a big accusation to make about a politician, but in this case, I think it is appropriate.

There is no reason for Rachel Reeves to impose austerity. She might be sure that there is no money left, but nothing could be further from the truth.

I have now almost completed work on what I call the Taxing Wealth Report 2024. In its full version it is 130,000 words long. That many were required to provide more than 30 detailed proposals for the reform of the UK tax system and existing UK taxes. The resulting recommendations suggest that more than £90 billion of additional tax revenue could be raised each year from those with wealth and they would still be under-taxed. In addition, more than £100bn might also be made available for investment in public infrastructure as a result of changes to the rules attached to tax incentivised saving in things like ISAs and pensions.

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To be candid, there is no UK government that could usefully spend that much extra money right now. It might not even be wise to try to do so. I should however make clear that I was not suggesting anyone should do everything I suggested possible. Instead, my aim was to make it clear that there are a multitude of options available to a chancellor who does want to spend and invest more. Doing so is not a problem. What I’ve done is spoil them with choice.

That said, those choices do come at a cost. The cost is to those who are in the top 10% (or less) of the income profile, many of whom are significantly under taxed at present. That is because they much lower rates of tax on their investment income and gains derived from wealth than are paid by people who work for their whole income. They also enjoy massive subsidies to their wealth through the pension system and through ISAs, which usually mean that they enjoy personal tax subsidies that are much bigger than any benefit payment a low-income person might enjoy. In addition, many of them can also take advantage of the low rates of tax paid by limited companies.

I stress that I am not proposing that anyone in these income brackets should pay an unfair tax rate. All I am suggesting is that they might pay something close to the tax rate paid by those on the lowest 80% of incomes in the UK as a whole. How anyone can think that unfair, is beyond me. But it seems that Rachel Reeves does because she has ruled out all tax changes for this privileged part of society. The consequence is that they will continue to enjoy massive subsidies from the state, whilst those who are in need will be penalised, and everyone will suffer austerity.

In my opinion, it is morally corrupt or even wicked to permit lower overall rates of tax to be paid by many of those with the highest income in our society than are paid by those with lower incomes while simultaneously denying public services to those who need them and cannot afford an alternative. Being a politician is all about making choices. There is bound to be disagreement on some of those choices, but when it comes to those that Rachel Reeves is making, I simply think that they are profoundly wrong on the basis of any ethics that I can think of, and I am happy to say so.