What Rachel Reeves isn’t telling us should alarm voters, says ALEX BRUMMER

Coincidentally, I bumped into a friend in recent days – a wealthy, lifelong Labor supporter and donor.

During a brief conversation, he noted that much remains to be done for the next government, especially in the areas of healthcare and public services. Then came the sting.

That could only happen if Labor raised taxes. It doesn’t matter that revenues, at 37.9 percent of national output, are at record peacetime levels.

Now that Labor has reasserted its superiority at the ballot box in the council polls and the South Blackpool by-election, it will be difficult to escape an intense focus on what a party of Keir Starmer and Rachel Reeves will do in power.

Shadow Chancellor Reeves has set out to build a reputation for fiscal rectitude.

She played a key role in thwarting Ed Miliband’s ambition to spend £28 billion a year on a green revolution. As far as income is concerned, she has been content to push the buttons. Wealth taxes are excluded.

However, her campaign against people with non-domiciled tax status (a policy partly stolen by the Tories) and the attack on the charity status and VAT privileges of independent schools lie precisely in that area.

If there is a common theme around what she and Labor are proposing, it is about closing loopholes used by rich people and rich companies.

The intention to abolish tax benefits for new investments in the North Sea falls into this category.

Bank rate windfalls from deposits at the Bank of England could also be a soft target.

Knowing that Reeves is interested in what is happening on the other side of the Atlantic, it would be surprising if she had not noticed the comments of Vitor Gaspar, the IMF’s budgetary overlord.

At the recent spring meetings in Washington, he argued that closing loopholes could be the best approach for Western countries looking to put their finances in order after the shocks of the pandemic and Russian aggression in Ukraine.

History tells us that when new brooms arrive at the Treasury, there is always a black hole.

Labour’s former chief secretary Liam Byrne left a now legendary note for his coalition successor David Laws in 2010: ‘There is no money. Good luck!’

In 1997, Gordon Brown inherited relatively benign public finances from Tory predecessor Ken Clark.

Brown came well prepared with secret tax schemes to finance his valuable projects: a tax on privatized energy companies and a raid that closed an alleged loophole that allowed British pension funds to receive effectively tax-free dividends.

Pre-election pledges and manifesto promises are like dust when the books are opened. Mazes, a favorite of Reeves, offer many opportunities to worsen the pain.

She has already identified £5 billion to be collected from tax avoiders. The general view is that this largely consists of the ‘fat cats’ who use the best advice.

Easy choice: Pensions are an easy choice, as both Gordon Brown and subsequent Chancellors have discovered

The reality is that it is the self-employed, sole proprietor or small business owner who struggles to make ends meet and is careless with record keeping who is on the front lines.

Pensions are an easy choice, as both Brown and subsequent chancellors have discovered. Generous tax credits, which benefit higher-income earners more than those lower down the pecking order, can be seen as a loophole.

Treasury orthodoxy has long viewed such ruptures with disdain. So abolishing tax relief for higher income taxpayers or reintroducing the £1 million cap on pension pots are obvious things to look at.

Another tax full of loopholes is VAT. Last year the Institute for Fiscal Studies, a think tank quoted with reverence by Labor politicians, argued that gaping fissures in the British system (rather than loopholes) mean a £100 billion pot of gold needs to be plundered.

It’s easier said than done, as George Osborne discovered when he tried to impose VAT on certain local foodstuffs in 2012 – the so-called pasty tax.

Although we pay VAT on sanitary installations, there is a whole range of financial services, one of the largest sectors of the economy, that escape the tax.

Reeves is wisely silent on such ideas. But it is what she does not tell us, rather than the public statements, that should alarm voters under pressure.