Chancellor Rachel Reeves on Tuesday prepared the public for further tax rises in this month’s Budget as she repeatedly refused to recommit to Labour’s manifesto pledges.
In a speech from Downing Street soon after markets opened at 8am, Reeves said that “austerity, reckless borrowing, made up numbers” were “the problem, not the solution”.
The chancellor refused when asked to repeat her manifesto pledge not to raise the rates of income tax, national insurance or value added tax. “I will set out the individual policies at the Budget,” Reeves said.
She pointed to a looming downgrade in productivity forecasts by the government’s fiscal watchdog, the Office for Budget Responsibility. The downgrade will blow a hole in her spending plans.
It is “clear that the productivity performance that we inherited from the last government is weaker than previously thought,” Reeves said.
“My focus will be on getting NHS waiting lists down, getting the cost of living down, and also getting the national debt down,” she added.
The Budget is shaping up to be a potentially defining moment for Sir Keir Starmer’s government, as it contends with a fiscal hole economists estimate at about £30bn, sluggish economic growth and a plunge in the opinion polls.
