TAXES will likely be raised in the Autumn Budget, Rachel Reeves has said.
The Chancellor said Labour would stick to its election manifesto promises not to raise national insurance, income tax or VAT, but left open the possibility for other tax hikes at the Budget on October 30.
“I think that we will have to increase taxes in the Budget,” she said while speaking to The News Agents podcast.
Reeves’ admission comes a day after she announced the Winter Fuel Payment for pensions would be means-tested, among a series of measures aimed at filling a £22 billion black hole in public finances.
Reeves did not state what taxes would be raised when asked on the podcast whether Labour would stick to its manifesto promises, and instead raise inheritance tax or capital gains tax, or undertake pension reform.
She said: “We had in our manifesto a commitment to fiscal rules to balance day-to-day spending through tax receipts, and by the end of the forecast period, to get debt down as a share of GDP.
“Those are sensible fiscal rules to keep a grip of the public finances. We also made other commitments in our manifesto, not to increase national insurance, VAT or income tax for the duration and we’ll stick with those.”
Pressed again about which taxes could go up, she added: “We will have a Budget on October 30 and ahead of that Budget, we will have a forecast by the Office for Budget Responsibility on this occasion, based on accurate numbers.”
On Monday, the Chancellor said she was making “difficult decisions” as she accused the previous government of leaving £22bn of unfunded commitments that it had “covered up from the country”.
In a statement to Parliament, she set out “immediate action” to address the shortfall by £5.5bn, with the rest of the gap to be addressed at the Budget.
In a hint that taxes may have to increase, Reeves said the Budget will “involve taking difficult decisions to meet our fiscal rules across spending, welfare and tax”.
