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Britain could raise £7 billion a year by tightening existing wealth taxes and cutting subsidies on the rich, experts said today.

The money could be used to cover an expected £36bn a year increase in the cost of public services by 2030, according to research by the Resolution Foundation.

The respected think-tank suggested Chancellor Philip Hammond should limit tax breaks for entrepreneurs to raise £1.6bn a year and clamping down on inheritance tax loopholes, which could raise £200 million a year.

And they called for England to replicate Scotland’s approach to Council Tax, raising the tax for the highest bands only and raising £1.4bn a year by 2020 in England alone.

Torsten Bell, director of the Resolution Foundation, said: “Britain has unfortunately got used to weak income growth but soaring wealth, which is now worth seven times the size of our economy. It’s time our tax system caught up with that fact.

“Maintaining our valued public services in the face of the big cost pressures of an ageing population, requires better wealth taxation to help fund this gap.”

(Image: AFP/Getty Images)

The Resolution Foundation’s briefing note, published today, also suggests capping tax relief on pensions lump sums and scrapping Lifetime and Help To Buy ISAs introduced by George Osborne, which they say are “poorly targeted and expensive.”

Adam Corlett, Senior Economic Analyst at the Resolution Foundation, said:

“Britain’s wealth is undertaxed, and the wealth taxes we do have are in serious need of reform.

“There’s a strong case for scrapping council tax and inheritance tax altogether, and replacing them with proper wealth taxes that are more progressive and harder to avoid.

“The Chancellor can make small steps in this direction by tightening up five of our existing wealth taxes and subsidies ­– raising almost £7bn in the process.”