Rachel Reeves has hinted at the possibility of tax increases in the upcoming Budget. The Chancellor refrained from reaffirming her previous commitment not to raise taxes further, citing the need to address financial challenges. Reeves emphasized the changing global landscape and the impact on the economy, mentioning conflicts in Europe and the Middle East, trade barriers, and borrowing costs.
While facing speculation about a potential VAT hike, Reeves reiterated her determination to avoid raising key taxes for working individuals. She reaffirmed the Labour party’s manifesto promise not to increase VAT, National Insurance, and income tax for working people. When asked about VAT specifically, she emphasized the manifesto’s commitment to easing the economic burden on working people.
Reeves declined to definitively rule out a VAT increase, explaining that she preferred not to dissect the manifesto line by line before the Budget announcement. She also addressed concerns about the two-child benefit limit, expressing her dedication to combating child poverty through initiatives like free school meals and increased minimum wages.
The Chancellor stressed the importance of balancing financial constraints with social welfare objectives to combat child poverty effectively. As the Budget approaches, discussions continue on potential tax adjustments and social welfare policies.
