The REAL Labour agenda? Tony Blair warns UK faces £50bn in tax hikes by 2029 after Rachel Reeves 'paves the way to raise the burden' by warning public finances are in the 'worst state since the Second World War'

Fears are mounting over a Labour tax raid today after Tony Blair warned Keir Starmer he could need to push up the burden by £50billion.

The former PM raised concern that the extra revenue will be needed unless the government 'changes approach' on issues like AI.

But the intervention will raise fresh alarm after new Chancellor Rachel Reeves was accused of paving the way for taxes.

Ms Reeves issued a doom-laden warning yesterday about the 'spending inheritance' from the Tories.

And she revealed she has already commissioned Treasury officials to conduct a review of the public finances 'so that I can understand the full scale of the challenge'.

Conservatives said it showed their election attack lines about Keir Starmer not being honest about his tax plans were coming true. 

Labour's manifesto pledged the party would not raise the headline rates on income tax, National Insurance or VAT. However, Rishi Sunak argued that there were a host of loopholes in the commitments that Sir Keir would exploit.

The intervention by Sir Tony - who is a close ally of Sir Keir - came in a report released by his institute today. 

It suggests that the government must harness AI to boost productivity, or face an even higher tax burden than that already 'baked in'.

Just to stabilise debt, the analysis found the UK is on course to need a 1.9 per cent increase in the tax to GDP ratio by 2029, equivalent to around £53billion at current prices.

In a round of interviews this morning, Sir Tony told BBC Radio 4's Today programme he was not predicting that is what Labour would do.

'If you don't do this the future is one in which you are going to be poorer.' 

Sir Tony also told the Guardian that Labour must be tough in tackling immigration, to avoid a further rise in 'populism'.

'Progressives should be thinking about the answers, but you've got to understand what the populist does,' he said.

'The populist usually doesn't invent a grievance, they exploit the grievance. If you want to close off their avenues for increasing support, you've got to deal with the grievance. 

'That's why Keir is absolute right in saying you've got to have controls on immigration.

'That doesn't mean to say we don't celebrate the good that immigration can do, because it does an immense amount of good for this country, but you do need to have controls.'

Sir Tony also sounded a sceptical tone on Labour's plans to hit Net Zero emissions by 2030, including doubling onshore wind and quadrupling offshore wind. 

'I'm 100 per cent in favour of Labour doing everything it can to meet its targets, so don't misunderstand me,' he said. 

'It's just one thing I think Labour should be very open about is the Tories on this, as in so many other areas, have left a complete mess.

'The gap between what they promised we would be in a position to do and where we are now is massive, and you're talking about quadrupling renewable energy … with the best will in the world its going to take some time. 

'It's not that I think Labour should give up on its ambitions. It's just it should be realistic about how tough it's going to be.'