RACHEL Reeves has given the clearest hint yet that taxes will go up at the Budget – in the face of global pressures and conflicts.
The Chancellor all but revealed she will have no choice but to act to fill a £30 billion black hole in public finances.
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When asked if she would be coming back for more tax rises, she said the UK wasn’t “immune” to world events.
The Chancellor also refused to categorically rule out hiking VAT when she delivers that Budget at the end of November.
The Chancellor was pushed on her comments to the CBI business group when she said she was “not coming back for more” over extra borrowing or taxes.
Ms Reeves told the BBC‘s Today programme: “Well, I think everyone can see that in the last year the world has changed and we’re not immune to that change.
“Whether it is wars in Europe and the Middle East, whether it is increased barriers to trade because of tariffs coming from the United States, whether it is the global cost of borrowing, we’re not immune to any of those things…
“We also know the Office for Budget Responsibility are reviewing the productivity numbers based on the past productivity experience under the last government, and are set to make changes.
“Then we have to respond to those because it’s very important, and this is where the iron discipline comes in, it’s very important that we maintain those commitments to economic stability.”
Ahead of her conference speech at lunchtime, she was also asked to comment on whether VAT would be hiked.
It came just 24 hours after Sir Keir Starmer refused to say VAT would stay at the same rate at the Budget.
Ms Reeves said “the manifesto commitments stand” with critics saying that could change at a later date.
She said: “Well, those manifesto commitments stand for a reason. Because at the general election last year, we were in a position where working people had seen their living standards decline.”
The Chancellor was also asked where her “iron discipline” was after her u-turn on winter fuel payments.
Pressed on whether she would cut the welfare bill, she said: “Stephen Timms, the minister at the work and pensions department, is doing a review with disabled groups and businesses to look at how we can help more people with disabilities back into work and contributing to the economy.”
Challenged on whether she was going to cut the benefit bill, she said: “The benefit bill that we inherited is too high, and it’s going up too much. Even with the changes that we set out before the summer, they weren’t cuts to welfare.
“They would just see welfare spending going up at a slower rate than it otherwise would.”
