Chancellor Rachel Reeves refuses to rule out manifesto-breaking tax hikes
Rachel Reeves has refused to rule out breaking her manifesto pledge not to raise certain taxes, as she lays the groundwork ahead of the budget later this month.
Asked directly by our political editor Beth Rigby if she stands by her promises not to raise income tax, national insurance, or VAT, the chancellor declined to do so.
She told Rigby: “Your viewers can see the challenges that we face, the challenges that are on [sic] a global nature. And they can also see the challenges in the long term performance of our economy.”
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She went on: “As chancellor, I have to face the world as it is, not the world as I want it to be. And when challenges come our way, the only question is how to respond to them, not whether to respond or not.
“As I respond at the budget on 26 November, my focus will be on getting NHS waiting lists down, getting the cost of living down and also getting the national debt down.”
‘Each of us must do our bit’
Ms Reeves’s comments to Rigby came after a highly unusual pre-budget speech in Downing Street in which she set out the scale of the international and domestic “challenges” facing the government, and hinted at tax rises, saying: “If we are to build the future of Britain together, each of us must do our bit for the security of our country and the brightness of its future.”
Despite her promise that last year’s budget – which was the biggest tax-raising fiscal event since 1993 – was a “once in a parliament event”, the chancellor said that in the last year, “the world has thrown even more challenges our way”, pointing to “the continual threat of tariffs” from the United States, inflation that has been “too slow to come down”, “volatile” supply chains leading to higher prices, and the high cost of government borrowing.
She also put the blame squarely on previous Tory governments, accusing them of “years of economic mismanagement” that has “limited our country’s potential”, and said past administrations prioritised “political convenience” over “economic imperative”.
Ms Reeves said: “The decision to pursue a policy of austerity after the financial crisis dealt a hammer blow to our economy, gutting our public services and severing the flows of investment that would have put our country on a path to recovery.
“The years that followed were characterised by instability and indecision, with crucial capital investment continually sacrificed, and hard decisions put off again and again. And then a rushed and ill-conceived Brexit that brought further disruption as businesses trying to trade were faced with extra costs and extra paperwork.
“All this meant that when the pandemic arrived, our country was underprepared, our public services weakened and our economy fragile. We finished the pandemic with higher death rates and higher debt than our peers.”
She added: “This isn’t about re-litigating old choices – it’s about being honest with the people, about the consequences that those choices have had. It is my job to deal with the world as we find it, not the world that I might wish it to be.”
Amid that backdrop, Ms Reeves set out her three priorities for the budget: “Protecting our NHS, reducing our national debt, and improving the cost of living.”
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