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Rachel Reeves should avoid dipping into a ‘Scrabble bag’ of tax rises as she tries to close a funding shortfall in November’s budget, MPs have heard.

The Treasury committee is taking evidence from top experts about the chancellor’s tax options in the upcoming budget (you can watch the session here).

Dan Neidle, founder of Tax Policy Associates, tells the committee that Reeves has two choices if she decides to raise taxes. The wise way would be to raise one of the UK’s main taxes, or perhaps expand the base of VAT, moves that could break the Labour party’s manifesto pledges.

The less wise way, Neidle adds, is to raise the tax take “from picking from a Scrabble bag of lots of little, individual tax rises”.

This would be suboptimal, Neidle argues, as the UK has seen plenty of minute changes, here and there, to the tax system over the last 30 years.

He says:

Over that time the tax system has become more and more complex, accumulated more and more anomolies and political compromises that become baked in.

Every time you create 10 small tax rises or tax changes, you’re adding to that layer that have ossified our tax system. I very much hope she won’t do that.

Helen Miller, director of the Institute of Fiscal Studies, takes a similar line. She explains that Reeves could raise lots of additional tax revenues without breaking manifesto promises.

“Whatever Rachel Reeves decides to do, there’s a huge opportunity to reform taxes to improve ecoonomic growth.”

Yesterday, the IFS advised the chancellor to avoid “a half-baked dash for revenue” by stitching together unrelated tax-raising measures.

Ruth Curtis, CEO of the Resolution Foundation, says there is a strong case for raising taxes at this budget, pointing out that UK borrrowing costs are higher than other rich countries.

Curtis explains that in a world of low growth and sticky inflation, it is important that tax rises minimise the impact on growth and inflation.

Curtis also argues that the chancellor must thinnk about how the distribution of the pain of tax rises hits as the UK has barely emerged from cost of living crisis,

Dr Arun Advani, professor of economics at Warwick University, point out that if the spending side of budget is fixed, tax rises are the only thing left.

And in a move towards Neidle’s scrabble bag, Advani argues there are plenty of ways of raising taxes that also improve the tax system.

He points to areas where otherwise equal behaviour is treated differently by the tax system.

This creates complexity, scope for tax avoidance, and is very bad for economic efficiency and growth, Advani warns, adding:

Fixing those things would raise money while making the tax system better.