Chancellor Rachel Reeves is already looking at cutting the 5% VAT rate charged on energy bills and is also said to be considering reducing green levies on bills
Rachel Reeves has promised “targeted action” in next month’s Budget to help struggling families with the cost of living.
The Chancellor is already looking at cutting the 5% VAT rate charged on energy bills and is also said to be considering reducing green levies on bills. A Treasury source said: “We know Brits are still struggling with cost of living and that is why we are determined to take action where we can, including reducing people’s energy bills.”
Speaking at the International Monetary Fund (IMF) on Thursday, the Chancellor told the BBC she is planning “targeted action to deal with cost of living challenges”.
Ms Reeves also suggested to reporters higher taxes on the wealthy will be “part of the story” when she delivers the Budget statement on November 27. The Chancellor said those with “broadest shoulders shoulders should pay their fair share of tax”
READ MORE: Rachel Reeves drops biggest hint yet on tax rises and spending cuts in Budget
And she hit back at “scaremongering” after her maiden Budget last year which included VAT on private school fees and scrapping the non-dom tax status for the super-rich.
She told The Guardian: “Last year, when we announced things like the non-doms, like the (tax increase for) private equity, like the VAT on private school fees, there was so much bleating that it wasn’t going to raise the money – that people would leave.
“The OBR [Office for Budget Responsibility] will publish updated numbers on all of those things. And that scaremongering didn’t pay off, because this is a brilliant country and people want to live here. And I think, when people scaremonger again this year, we should take some of that with a pinch of salt.”
It comes as the Chancellor faces warnings the government will have to plug a £20billion-£30billion blackhole in the public finances in order to meet her spending rules.
No 10 said yesterday on Thursday the “manifesto stands” on the party’s pledges not to raise VAT, income tax or national insurance.
The Prime Minister’s official spokesman referred to the Chancellor’s recent interviews, in which she has acknowledged asking the wealthier to pay more in last year’s Budget.
“And when asked, ‘should we expect to see more of that’, she said that will be part of the story in the Budget, but we’ll be focusing on things that don’t impact on growth, because we need to unlock that economic growth for our economy,” he said.
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