Reeves hints at ‘responsible’ tax increases in Autumn Budget
Austerity, a chaotic Brexit, and Liz Truss’s disastrous mini-budget led to more than a decade of stagnation, and the Labour government’s budgets will instead focus on productivity.
This is the view of Chancellor Rachel Reeves, who penned an opinion piece for the Guardian on Thursday (14 August). In it, Reeves calls for calm over increasing concerns of tax hikes in her Autumn Budget.
“The months and weeks before any budget are filled with people speculating about – or claiming to know – what tax and spend decisions I will take or what the Office for Budget Responsibility will conclude. This budget is no different – I get that. I will set out the decisions I take in a responsible manner.
“But just as my focus over the past 12 months has been about kickstarting economic growth for the benefit of working people, so will my next. Because Britain’s productivity problem is not an abstract, technocratic one – it directly affects every working family in Britain who feel they are squeezing every penny to make ends meet.”
When businesses can’t grow, wages stagnate, and there is less money in the pockets of working people. When infrastructure is inadequate, costs rise, and opportunities are lost, she said.
“When skills do not match economic needs, potential goes unfulfilled. With lower productivity, tax revenues go down and our public services face cuts. And with the world changing, Britain has been left too exposed to global shocks.”
The Chancellor’s renewed focus comes as the Treasury prepares for a potentially severe downgrade to productivity forecasts from the OBR — a shift that could leave a £20 billion gap in tax and spending plans.
That shortfall, compounded by sluggish growth prospects, rising debt interest costs, and repeated reversals on welfare cuts, has prompted Reeves and the prime minister to begin paving the way for tax increases and policy changes from September, ahead of the autumn budget.
