In an unusual move, chancellor gives speech warning of a tough Budget later this month, blaming global challenges and batting aways questions about imminent tax rises
Described by the Treasury as a ‘scene setting speech’, Rachel Reeves set out the major challenges shaping her tax plans in the run-up to the Budget at the end of the month, pointing to escalating external factors since last autumn and warning of tough decisions on 26 November.
Reeves refused to be drawn on plans for tax rises, but these are widely expected with income tax increases the most likely to raise enough tax revenue to address an estimated £20-30bn spending gap. This would break the Labour government’s manifesto to not raise the three big taxes of income tax, VAT and national insurance on ‘working people’, a message repeated throughout the 2024 election campaign.
A return to austerity was ruled out by Reeves, who said her three priorities were cutting NHS waiting lists, cutting the cost of living and paying off the national debt.
