Reeves gives unusual pre-Budget speech – refuses to rule out tax hikes
Rachel Reeves delivered an unusual pre-Budget speech to the public on Tuesday (4 November), setting out the choices the country faces and the values that will guide her decisions.
The Chancellor began her presentation by noting that it will be a Budget led by this government’s values, of fairness and opportunity, and focused squarely on the priorities of the British people.
She added that this will include protecting the NHS, reducing national debt, and improving the cost of living.
“You will all have heard a lot of speculation about the choices I will make. I understand that these are important choices that will shape our economy for years to come. I want people to understand the circumstances we are facing, the principles guiding my choices – and why I believe they will be the right choices for the country.”
A host of challenges
Reeves noted that years of economic mismanagement has limited the country’s potential, with long-term issues continually unchecked, leaving potential unrealised.
“I put our public finances back on a firm footing, provided an urgent cash injection into a faltering public services and began rebuilding our economy. But since that budget, the world has thrown even more challenges our way.
“The continual threat of tariffs has dragged on global confidence, deterring business investment and dampening growth.”
Reeves added that inflation has also been too slow to come down and that supply chains continue to be volatile, meaning the costs of everyday essentials remain too high.
Another key concern is that the cost of government borrowing has increased around the world, a shift that Britain, with a high levels of debt left by the previous government, has been particularly exposed to, she said.
“And, in an uncertain world, we also face pressure to increase our defence spending, and it is right that we do that, protecting ourselves from hostile actors and supporting our allies.”
Reeves also touched on the issue of productivity, which has come in lower than forecast. “That has consequences for working people, for their jobs, for their wages, and it has consequences for the public finances, too, in lower tax receipts,” she said.
Tax increases
When pressed about whether the country will face further tax hikes, Reeves remained coy, noting that the ‘individual choices’ will only be revealed during the Budget itself.
However, Reeves also refused to say whether she would stick to manifesto pledges about not hiking taxes.
“I will only set out the individual policies of the budget until the 26th of November. That’s not what today is about. Today is about setting the context up for that budget.
“Viewers can see the challenges that we face, the challenges that are on a global nature. And they can also see the challenges in the long-term performance of our economy. And the Office for Budget Responsibility will set all that out. They’ve done the review of the supply side of the economy that looks at the past, but they use the past to predict the future.
“As Chancellor, I have to face the world as it is, not the world that I want it to be. And when challenges come our way, the only question is how to respond to them, not whether to respond or not.
“And as I respond on the budget 26 November, my focus will be on getting NHS waiting lists down, getting the cost of living down, and also getting the national debt down.”
