In her inaugural Autumn Statement, Chancellor Rachel Reeves of the new Labour government has firmly excluded any increases in national insurance, VAT, or income tax. Despite this, Reeves has acknowledged that significant tax hikes will be necessary to address a substantial £22 billion public finance gap.
Speaking on the News Agents podcast, Reeves emphasized that while national insurance, VAT, and income tax will not see rises, other areas may be affected. Specifically, she did not rule out potential increases in inheritance tax, capital gains tax, or changes to pensions.
Reeves underlined the necessity for forthcoming tax increases, stating, “I think that we will have to increase taxes in the budget.” However, she reaffirmed Labour’s commitment to avoiding increases in the three specified taxes during this parliamentary term.
In her discussion with Emily Maitlis, Reeves cautioned that further challenging decisions lie ahead. She attributed the current fiscal difficulties to the previous Conservative administration, asserting that without the Labour government’s intervention, the UK might have faced similar economic instability as during Liz Truss’s tenure as Prime Minister.
