Rachel Reeves has set the date for the Budget announcement amid concerns about potential tax increases. The Chancellor is scheduled to present the crucial statement outlining the government’s fiscal plans on November 26. Reeves is reportedly devising strategies to enhance the economy for regular working individuals, emphasizing the need to combat inflation that is straining household finances.
The decision to delay the announcement is intended to provide an opportunity for initiatives aimed at boosting productivity during the fall, with hopes that the Office for Budget Responsibility (OBR) will reflect these efforts in its forecasts. This will mark Labour’s second Budget following the party’s significant election win last year. In her previous Budget, Reeves raised taxes on businesses, imposed VAT on private school fees, and upped capital gains tax to allocate substantial funds to the struggling NHS.
In a recent video message, Reeves asserted that while Britain’s economy is not fundamentally broken, improvements are necessary to better serve working people. She highlighted the challenges of high bills and decreased returns, emphasizing the need for change. The Chancellor echoed these sentiments by acknowledging ongoing cost-of-living pressures and the importance of managing day-to-day spending to reduce inflation and borrowing expenses.
However, economic experts are cautioning that tax hikes may be inevitable to address the nation’s financial shortfall. The NIESR think tank forecasted a £41 billion deficit in meeting the self-imposed rule of balancing daily spending with tax revenues by 2029-30. Keir Starmer has reaffirmed Labour’s commitment to avoiding tax increases for working individuals, ruling out adjustments to VAT, national insurance, or income tax.
While aiming for a less extensive Budget compared to the previous year, the Chancellor faces challenges due to policy reversals and escalating borrowing costs. Recent developments in Downing Street indicate Prime Minister Boris Johnson’s restructuring of his economic team in preparation for the upcoming Budget. Despite reports suggesting marginalization, the Chancellor remains actively engaged in economic decisions.
Reeves’s statements coincided with former Tory PM Liz Truss’s warnings of a looming “calamity” under the current economic policies. Truss’s tenure was cut short after a tumultuous mini-Budget led to financial market instability, prompting criticism from Health Secretary Mr Streeting, who dismissed Truss’s advice on economic management.
The evolving political landscape signals a dynamic period leading up to the Budget announcement, with stakeholders closely monitoring developments. Stay updated by following our coverage on various platforms, including Google News, Flipboard, Apple News, Twitter, Facebook, and The Mirror’s homepage. For exclusive insights and opinions on UK politics, subscribe to the Mirror’s Politics newsletter for daily updates.