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 £30billion black hole in public finances.
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.
Labour went into the election promising not to raise VAT, income tax and national insurance.
Ms Reeves said told LBC Radio that “you’ll know we made those commitments in our manifesto, and those manifesto commitments stand… those manifesto commitments to make working people better off, they stand”
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.”
A Labour rebellion heaped more pressure on the Chancellor over the summer when they abandoned £5 billion worth of benefits cuts.
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.”
Rachel Reeves will use her speech today to outline how long-term youths will be given guaranteed paid work.
Every young adult who has been on Universal Credit for 18 months without earning or learning will be given a paid work placement.
She wouldn’t be drawn on how much the scheme expected to be rolled out for 18-21 year-olds would cost.
The Chancellor said: “I’m going to set all that out in the budget… because that’s the time when we set out all of the numbers”
Labour MPs will also pile pressure on the Chancellor this week to scrap the two-child benefit cap.
But the move is expected to cost in the region of £3 billion but she insists the numbers must “add up” over lifting the cap.
The Chancellor said: “There’s absolutely more to do to make working people better off, to lift people out of poverty, to ensure that our businesses can trade around the world.”
When asked directly about scrapping the limit, she said: “That’s a decision for the Budget.
“No-one needs to tell me about child poverty, I came into this party because I desperately care about children and their life chances.
“It’s why we’ve done free school meals, it’s why we’ve done breakfast clubs, it’s why we’ve increased the national living wage, and the national minimum wage, so I’m that Chancellor that cares about child poverty.
“We will reduce child poverty, but we’ve also got to make sure the numbers add up, and people can trust me to ensure that that always happens.”
