UK finance minister Rachel Reeves signals potential tax increases in the November budget, saying “we will all have to contribute” to economic recovery.
LONDON: UK finance minister Rachel Reeves has signalled potential tax increases for workers in next month’s budget.
In a rare pre-budget address from Downing Street, the chancellor warned of “necessary choices” as Britain struggles with high debt and inflation.
Reeves told the nation that “we will all have to contribute” to improving Britain’s economy.
When questioned by reporters, she refused to rule out rises to income and value added taxes.
Speculation suggests at least one tax could increase to fund investments in public services.
“As I take my decisions on both tax and spend, I will do what is necessary to protect families from high inflation and interest rates,” Reeves said Tuesday.
Prime Minister Keir Starmer’s Labour government returned to power in July 2024.
Reeves previously hiked business taxes in her inaugural budget, a move blamed for weak economic growth over the past year.
She blamed the previous Conservative administration and global pressures including US tariffs for Britain’s current economic woes.
“The problem of the last 14 years is that political expediency always came above the national interest, and that is why we are in the mess that we are in today,” Reeves said.
She also cited Brexit fallout as contributing to current economic challenges.
Reeves said Starmer appointed her chancellor “not to always do what is popular, but to do what is right”.
Her speech comes as Labour trails the hard-right Reform UK party in opinion polls.
Following the address, the British pound retreated against the dollar.
“Rachel Reeves’s unusual stance of giving a big speech on the eve of the budget has left investors with more questions than answers,” said Dan Coatsworth, head of markets at AJ Bell.
He added that the speech “done nothing to remove uncertainty around taxes”. – AFP
