In a rare pre-Budget speech earlier today, Chancellor Rachel Reeves refused to stand by Labour’s election promise not to hike income tax, VAT, or national insurance
Rachel Reeves has insisted she won’t resign if she raises taxes in her Autumn Budget.
The Chancellor earlier today refused to stand by Labour’s election promise not to hike income tax, VAT, or national insurance. She admitted she’d have to make tough decisions in her November 26 Budget in order to priorities cutting NHS waiting list, get the cost of living down and reduce national debt.
In an interview this evening, LBC’s Andrew Marr told Ms Reeves she could offer her resignation if she raises income tax. He pointed to suggestions that she could tell the public at the Budget: “Look things are really bad.. The headwinds have been harder, the situation has been worse than I thought. Therefore, I have to raise income tax, but I promised you I wouldn’t.
“So tomorrow, I’m going to resign as Chancellor the Exchequer having done the right thing. I’m not going to behave like the last lot. I’m not going to play those games. I’m going to be honest and honourable.”
Ms Reeves replied: “And what do you think would happen in financial markets if I did that?”
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She continued: “I have been able to build a reputation and have been trusted with the public finances, I’ve steered our economy through some challenging times the last 15 months, increases in global tariffs, increases in volatility, increased tensions around the world, and yet our bond yields are lower than they were a few months ago, and have outperformed our peers.
“The FTSE is close to record highs. Our economy in the first half of this year was the strongest growing in the G7. So, I am not going to walk away because the situation is difficult. I was appointed as Chancellor to turn our economy around, and I’m absolutely determined to finish that job.”
Told the public may never trust her again if she breaks Labour’s manifesto promises, she said: “I think people want to understand what we’re doing and why. People voted Labour last year because they were sick to the back teeth of the previous government and their mismanagement and them putting party interest above the national interest.
“Now I’m sure that I could fiddle the numbers and move things around to meet the letter of the rules, but not the spirit of them. I could do and it’s what previous Chancellors did. They say that big capital project, the nuclear power station, the Northern Powerhouse Rail, 1.5 million new homes, we’ll put it back a couple of years, massage the figures.
“Of course, you could do that. Chancellors have done it before. Do you know why we’re in the mess we’re in now? Because that is what they did and I’m not going to do it.”
Speaking from Downing Street as the markets opened earlier today, Ms Reeves appeared to put the country on notice for tax hikes in a rare pre-Budget speech – warning “each of us must do our bit”. She said: “I have to face the world as it is, not the world as I want it to be.”
Ms Reeves said the Tories’ austerity slashing programme had dealt a “hammer blow” to the country. A “rushed and ill-conceived Brexit ” deal also hit firms trying to trade, she said.
Ms Reeves insisted it was her role to be “honest with people about the consequences those choices have had”. And she said she had been appointed Chancellor “not to always do what is popular, but to do what is right”.
She told LBC this evening that her Budget won’t be as bad as last year’s one, which saw £40billion of tax rises. “That was a once in a Parliament reset,” she said, in order to fill a black hole left behind by the Tories.
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