Rachel Reeves has hinted at the possibility of tax increases in the upcoming Budget. The Chancellor avoided reaffirming her previous commitment not to implement additional taxes, citing the need to address financial challenges. She emphasized the changing global landscape and its impact on the economy, including conflicts and trade barriers affecting the UK.
While facing speculation about a potential VAT hike, Reeves assured that she aims to avoid raising essential taxes for working individuals. She reiterated the Labour Party’s manifesto pledge not to raise VAT, National Insurance, or income tax for the working class. When asked specifically about VAT, she emphasized the manifesto’s principles aimed at alleviating economic burdens on working people.
Reeves declined to explicitly rule out a VAT increase, stating 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 commitment to combating child poverty through various initiatives such as free school meals and raising minimum wages.
The Chancellor emphasized the importance of balancing social welfare with financial sustainability, highlighting her dedication to reducing child poverty while ensuring fiscal responsibility.