Rachel Reeves Acknowledged She Was "wrong" to Claim Higher Taxes Were Unnecessary

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Chancellor Rachel Reeves recently acknowledged that she was "wrong" to claim higher taxes were unnecessary. Just a month before Labour's victory in the July election, Reeves had emphasized growth over tax hikes, stating that "we don't need higher taxes, what we need is growth." However, on Wednesday, she enacted the largest tax increase since 1993, raising taxes by £40 billion and sparking a rise in government borrowing costs that stabilized by Friday.

 

Trevor Phillips asked the chancellor why “a reasonable person would believe a single word you say” in future.

Rachel Reeves has been skewered by a Sky News presenter for massively hiking taxes just months after saying she had “no plans” to do so.

Trevor Phillips asked the chancellor why “a reasonable person would believe a single word you say” in future. pic.twitter.com/HJE3JythWE

— Spotted News (@spottednewsoff) November 3, 2024

 

Speaking to *Sky News* with Trevor Phillips*, Reeves explained her change in position, revealing that new information had come to light once she took office. She said, "I was wrong on 11 June, I didn’t know everything...when I arrived at the Treasury on July 5...I was taken into a room by the senior officials at the Treasury, and they set out the huge black hole in the public finances beyond which anybody knew about at the time of the general election." According to Reeves, the previous administration had concealed this financial deficit from the public, Parliament, and even the Office for Budget Responsibility (OBR).

 

The bulk of the £40 billion tax increase will be shouldered by businesses. Starting in April, employers' national insurance (NI) contributions will rise by 1.2 percentage points to 15%, and the earnings threshold for paying NI will drop from £9,100 to £5,000. Reeves said this adjustment would raise £25 billion over the next five years. Despite criticism, she defended the decision, stating that Labour chose to place the burden on employers instead of employees. "Yes, businesses will now have to make a choice," Reeves told Phillips. "Whether they will absorb that through efficiency and productivity gains, whether it will be through lower profits or perhaps through lower wage growth."

 

The Office for Budget Responsibility weighed in on the potential impacts, suggesting that the tax hike will largely be felt by workers, who may experience lower wages, and consumers, who may face higher prices. The OBR estimated that the increase in employers' NI could reduce overall work hours by the equivalent of 50,000 hours across the economy. Moreover, the OBR’s budget review indicated that these tax increases would not lead to the economic growth Labour had projected in its campaign promises.

 

Reeves, however, expressed determination to surpass the OBR's predictions, stating, "I’m not satisfied with those numbers, those aren’t the summit of my ambition." She reaffirmed her commitment to achieving greater economic growth, adding, "I think we can grow our economy faster than those numbers, and that’s my job now, to get those growth numbers up."

 

In the face of a challenging economic landscape, Reeves’ pivot on tax policy underscores the complexities of fiscal management and her commitment to stabilizing public finances.

 

Based on a report by Sky News 2024-11-05

 

 

 

[loong]

Why have there been no announcements regarding the dismissal of those civil servants in the treasury and those in the OBR who are obviously guilty of gross negligence?!

Or is it just that this "Black hole" did not exist and everything was in plain view.

Edited 2 hours ago by loong

[jippytum]

More lies and deceit just weeks before her budget. 

The chancellor and her boss Starmer are tarred with the same sleazy revelations weeks after the election.  The labour  manifesto  was based on lies and deception to con the public. 

[Purdey]

The words: "Dear Chief Secretary, I'm afraid there is no money. Kind regards - and good luck! Liam." Were left in a note the last time Labour left office. It's like a bad dream.

[Chomper Higgot]

Taxes being spent on providing public services as stated in the Labour Party Manifesto.

 

 

 

 

[JonnyF]

Yes she is indeed a massive liar. She's Labour after all. 

 

Just like Starmer and his claims to clean up politics while taking hundreds of thousands of pounds worth of freebies.

 

Labour's policy has always been to tax people to death and then waste the money, sometimes on illegal wars, sometimes supporting illegal immigrants, but always to the detriment of the British people who they despise. 

[Chomper Higgot]

7 minutes ago, JonnyF said:

Yes she is indeed a massive liar. She's Labour after all. 

 

Just like Starmer and his claims to clean up politics while taking hundreds of thousands of pounds worth of freebies.

 

Labour's policy has always been to tax people to death and then waste the money, sometimes on illegal wars, sometimes supporting illegal immigrants, but always to the detriment of the British people who they despise. 

 
‘always to the detriment of the British people?’
 

 

Labour’s October budget allocates £billions of extra funds to the NHS, Schools and education.

 

Definitely not to the detriment of the British people who use and rely on those services.

 

 

 

 

[JonnyF]

1 minute ago, Chomper Higgot said:

Definitely not to the detriment of the British people who use and rely on those services.

 

The very same people who are being taxed to death (at which point the increase in inheritance tax kicks in), or perhaps frozen to death if a pensioner. 

 

Reeves said there was no reason to raise taxes then raised them by 40 Billion. She is a liar. Pure and simple. 

 

 

[howerde]

The bulk of the £40 billion tax increase will be shouldered by businesses. Starting in April, employers' national insurance (NI) contributions will rise by 1.2 percentage points to 15

 

It will not be shouldered by business, they will pass these costs down to the employees wages and conditions  and the end users of their products, they will see future price rises, failure to do this by business will see their share price fall or simply move their business else where. 

[JonnyF]

6 minutes ago, howerde said:

 

It will not be shouldered by business, they will pass these costs down to the employees wages and conditions  and the end users of their products, they will see future price rises, failure to do this by business will see their share price fall or simply move their business else where. 

 

Exactly. Employees will pay in the end, whether by lower pay increases, lower bonuses or even losing their jobs. 

 

Either that, or they will raise prices and pass it to the consumer.

 

Either way Reeves lied. She is a liar, just like Starmer and the rest of the imbeciles in that party.