Rachel Reeves has again declined to repeat her promise not to raise taxes or borrowing in future budgets, but insisted she would not have to top up her spending plans either.
Appearing at the Great Northern Conference in Hull on Tuesday, Rachel Reeves again faced pressure to repeat her pledge, given to the Confederation of British Industry last month, that there would be no repeat of the £40 billion tax hikes she announced in her first budget.
Ms Reeves told the conference, sponsored by the Yorkshire Post newspaper, that public services would have to “live within their means” and that she would not be “coming back with another load of tax rises” or higher borrowing.
Speaking to reporters later on Tuesday, she suggested the risk of unpredictable “shocks to the economy” meant she could not “write five years’ worth of budgets in just five months”.
She told the CBI, last week, there would be no more borrowing and no more taxes. Days later, the Business Secretary and then the Prime Minister refused to stand by what she said. Now even she cannot repeat her own words
But she acknowledged that Labour’s current spending plans would mean “difficult decisions” for public services in the spring of 2025.
Ms Reeves’s appearance at the conference followed questions in the House of Commons where Conservative MPs also pressed her to repeat her promise on taxation.
Shadow chancellor Mel Stride asked whether Downing Street had “changed its mind”, or if Ms Reeves “spoke without thinking” when she told business chiefs she would not repeat her Budget hikes.
In response to repeated questioning on the issue, the Chancellor replied that the Government would “never have to repeat a Budget like that”.
Speaking after Ms Reeves’s appearance in Hull, shadow Treasury chief secretary Richard Fuller said the Chancellor was “again undermining business confidence”.
He said: “She told the CBI, last week, there would be no more borrowing and no more taxes. Days later, the Business Secretary and then the Prime Minister refused to stand by what she said. Now even she cannot repeat her own words.
“How can businesses be expected to create jobs, growth and wealth in the economy when the Government offers neither stability or credibility.”
Ms Reeves also used her appearance at the conference on Tuesday to announce plans to give mayors new powers to partner with innovation bodies in an effort to attract more private investment into their regions.
The Chancellor said the partnerships with Innovate UK and UKRI would be “a really important vehicle for bringing more research and innovation to all regions of the UK.”
