Rachel Reeves Leaves Door Open to Potential Tax Rises Next Year

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Chancellor Rachel Reeves has refused to categorically rule out tax increases next year, fueling uncertainty over Labour’s fiscal strategy. Speaking on Tuesday as she launched the Government’s spending review, Reeves emphasized the challenges of planning five years of budgets within the first five months of her tenure.  

 

Reeves, who raised taxes by £40 billion in her first Budget on October 30, defended the scale of the measures, describing them as a necessary step to address what she termed the “chaos and mismanagement” left by the previous Conservative government. She stressed that this was a “once-in-a-Parliament Budget” and promised not to repeat such a significant financial overhaul in the future.  

 

“I can’t write five years’ worth of budgets in just the first five months of government,” Reeves explained. “This was a once-in-a-Parliament Budget to wipe the slate clean. I will never have to repeat a Budget like that because we have now drawn a line under the mismanagement of the Conservatives.”  

 

Despite her reassurances, questions about Labour’s future tax plans have persisted. At the Confederation of British Industry (CBI) conference in late November, Reeves stated she would not pursue additional borrowing or tax hikes. However, Labour leader Sir Keir Starmer later avoided making a similar commitment.  

 

When challenged by Kemi Badenoch at Prime Minister’s Questions on November 27, Starmer declined to repeat the pledge, citing the unpredictability of future events. On December 6, Starmer elaborated on this stance, acknowledging that unforeseen circumstances, such as the Covid pandemic or the war in Ukraine, could necessitate changes to tax policy.  

 

“I don’t want to in any way suggest that we are going to keep coming back for more because that isn’t the plan,” Starmer said. “But what I can’t do is say there are no circumstances unforeseen in the future that wouldn’t lead to any change at all.”  

 

The £40 billion tax hike announced in October included a £25 billion increase in employer National Insurance contributions, which formed the bulk of the new measures. Reeves also unveiled a new spending review aimed at improving fiscal efficiency, urging government departments to find 5% in savings for day-to-day spending over the next five years.  

 

Reeves expressed confidence in achieving this target, emphasizing that the focus would be on ensuring taxpayers’ money was not wasted. “I have no doubt the 5% target can be achieved,” she said.  

 

While Reeves insists the October Budget was an exceptional measure, her reluctance to dismiss the possibility of further tax increases has left questions lingering about the government’s long-term approach. This uncertainty has amplified scrutiny over Labour’s economic policies as they navigate the challenges of stabilizing public finances amid shifting global circumstances.  

 

Based on a report by The Daily Telegraph 2024-12-12

 

 

 

[Homburg]

There is a problem with the above headline.

 

Rachel Reeves Leaves Door Open to Potential Tax Rises Next Every Year

 

Fixed it!

[JonnyF]

Of course.

 

She can't completely ruin the country's economy in one budget. It was a strong start to achieve her aims, but she will need several to achieve that goal. 

 

Good job her background is in customer complaints departments. 

[Chomper Higgot]

14 years of austerity is over, the damage it has done to public services and infrastructure needs fixing and is going to be costly.

 

A rumoured £100,000,000 tax on the parasitic gambling industry would be a good place to start.

 

https://amp.theguardian.com/society/2024/nov/25/labour-poised-announce-ratify-100m-gambling-levy-addiction-charity

 

 

[JulesMad]

This is NOT World News, just some local usa news...