By Kiran Fothergill

Public sector borrowing is now at a five-year high, and the Office for Budget Responsibility has just downgraded its growth forecasts. Against this backdrop, Labour is staking its credibility on a fiscal strategy built around targeted tax rises and closing so-called loopholes.

On paper, it sounds pragmatic, spread the burden fairly, protect services, and reassure the markets that Britain is living within its means. In practice, it risks becoming a tax trap; one that penalises the very entrepreneurs and investors we rely on for growth.

Relying on a narrow pool of high-net-worth individuals and businesses to balance the books is short-sighted. There is only so much revenue that can be squeezed before behaviour changes. Raise the tax burden too far and you risk a flight of capital, a drain of talent, and a slowdown in investment.

I hear this first-hand from business leaders across the country. Expansion plans are being shelved, new hires delayed, and machinery upgrades postponed because of the constant chatter about higher taxes. Uncertainty is corrosive, and when it is compounded by the prospect of a higher bill, rational business leaders pull back.

SMEs, which account for 60% of UK employment, are the most vulnerable. Unlike global corporates, they cannot simply shift profits overseas or move operations. They are embedded in local........

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