Reeves refuses to rule out tax rises in spring
Reeves refuses to rule out tax rises in spring
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Rachel Reeves has refused to rule out announcing further tax rises in the spring, after she delivered a speech designed to ignite growth in the British economy. The Chancellor said she would wait to see the results of the Office for Budget Responsibility’s next forecast before setting out any tax and spending plans.
She used the speech, at a Siemens science park in Oxfordshire, to confirm the Government’s backing for Heathrow’s third runway. Although four of her Cabinet colleagues attended the speech, one notable absentee was Ed Miliband, the Net Zero Secretary, who is known to be cool on airport expansion.
Outside the venue, a group of farmers in tractors held a noisy protest against the Chancellor’s changes to inheritance tax for family firms. Ms Reeves has pledged to deliver an update to the Commons on the state of the economy on March 26, and the Treasury has said it would not be a major fiscal event with the announcement of tax raising and spending cuts.
However, the Chancellor has also said she will stick by her fiscal rules, which ensure that day-to-day spending is funded by taxes and that borrowing only happens for investment. Many economists now believe she will not be able to meet these rules, and next week the OBR will hand the Treasury their forecast laying out whether they think she will.
Asked whether she would consider a tax and spend even on March 26 if the economy continues to underperform, she said: “I’ve been really clear about the fiscal rules. They are non-negotiable. They are what give stability to our economy but we’re still two months off and a lot of things happen in that time.”.
