Chancellor Rachel Reeves said the ‘world has changed’ as she declined to repeat her pledge that she wouldn’t carry out another round of tax hikes in the Budget
Rachel Reeves has dropped a major hint that taxes could rise in the Budget.
The Chancellor refused to repeat her previous pledge that she won’t be “coming back for more tax” as she faces a battle to balance the books. It comes as Ms Reeves battles to balance the books in a make-or-break Budget in November.
Asked to restate her pledge on the Today programme, she said: “Well, look, I think everyone can see in the last year that 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.”
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Amid questions over whether she is looking to hike VAT, said she was “determined not to increase those key taxes that working people pay”. And she insisted the Labour manifesto to not hike VAT, National Insurance and income tax for working people “stands”.
Pressed on VAT, she told ITV’s Good Morning Britain: “The manifesto stands and it stands for a reason that working people bore the brunt of the economic mismanagement of the last government and the cost-of-living challenges are still people’s number one biggest concern.
“That’s why I’m determined to make working people better off and why I’m determined not to increase those key taxes that working people pay, and that’s why we made those commitments in the manifesto, and that’s why we stand by them.”
Asked to rule out an increase to VAT, she said: “The manifesto stands and it stands for a reason.”
She repeatedly would not explicitly rule out raising VAT, saying she did not want to go through the manifesto “line by line” before the budget and that “as soon as you answer one question you’ll move on to the next one”.
Ms Reeves was also pressed on the controversial two-child benefit limit, which many Labour MPs want to be scrapped.
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.”
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