Reeves refuses to rule out autumn tax raid

Yahoo

2 days ago

Rachel Reeves has refused to rule out further tax rises in the Autumn as Cabinet colleagues pile pressure on the Chancellor to unleash more money for public spending.
Ms Reeves repeatedly declined to rule out raising taxes on families and businesses at an event on Thursday night as she prepares to set out Whitehall spending plans for the next three years.
'I'm not going to say that I'm not going to take any tax measures in the next four years,' she told an audience of business leaders at the Confederation of British Industry (CBI) annual dinner.
Asked four times by CBI president Rupert Soames to reassure Britons they would not be subject to higher taxes, Ms Reeves could only commit to avoiding a repeat of the record £40bn tax raid she launched last Autumn.
'I'm not going to be able to write all four years of budgets sitting here this evening,' she said.
Economists have warned that a series of spending commitments made by Sir Keir Starmer, including restoring winter fuel payments to most pensioners and speculation that the two-child cap on benefits will be lifted, will force the issue and lead to higher taxes in the Autumn.
JP Morgan has estimated that taxes may need to rise by up to £24bn to cover recent policy announcements and to compensate for the hit to growth from higher tariffs.
Pressure is also building on Ms Reeves from Labour's Left after the leak of a memo sent to the Treasury by Angela Rayner's department ahead of the Spring Statement. It detailed potential tax rises that could have avoided spending cuts to balance the budget.
Ms Reeves on Thursday insisted the economy was 'turning the corner' even as she admitted that growth was too low, leaving families 'struggling with living standards not improving'.
Bosses warned that Labour's workers' rights overhaul was set to worsen the problem. A survey by the Institute of Directors published on Friday found over seven in 10 business leaders believed the upcoming Employment Rights Bill would have a negative impact on UK economic growth.
The Chancellor insisted growth around the world had been disappointing.
'None of our countries are growing at the rate that we used to or the rate that we want to. All of us are struggling with living standards not improving and our citizens are becoming restless,' she said.
Cabinet colleagues including deputy prime minister Ms Rayner are piling pressure on the Chancellor to release more money for government departments ahead of the Spending Review on Wednesday.
Ms Reeves also hinted that the Government was preparing a package of measures to help businesses deal with higher energy costs. She signalled her three year spending review would also unleash a wave of funding for infrastructure projects, from renewables to nuclear energy.
She said: 'I know that one of the questions that we need to answer is how we're going to make energy more affordable, particularly for some of our most intensive energy-using businesses where the price differential with other countries around the world is just too acute for many to be competitive.
'And so that's a question we will answer in the industrial strategy in a few weeks.'
The cost of power for factories in Britain is now about 50pc more expensive than in Germany and France, and four times as expensive as in the US.
The commons business select committee on Friday warned that high energy prices were holding back growth and urged ministers to address the issue as part of the upcoming industrial strategy.
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