With borrowing and national debt soaring and the Autumn Budget just weeks away, Chancellor Rachel Reeves this week refused to quell fears Britain faces a spate of tax rises. Conservative leader Kemi Badenoch branded Reeves’ speech as “one long waffle bomb” which left baffled business leaders “none the wiser”.
Reeves has pledged to come up with a “Budget for growth with fairness at its heart” aimed at bringing down NHS waiting lists, the national debt and the cost of living. But with borrowing soaring to £20.2billion last month, the highest September borrowing figure for five years according to the Office for National Statistics (ONS), does Reeves have the ability to turn round our stagnating economy?
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Rachel Reeves stressed in her unusual pre-Budget speech how her commitment to her fiscal rules was “iron-clad”, setting off alarm bells that she wants to increase her financial wriggle room.
She said: “There is a reward for getting these decisions right to build more resilient public finances with the headroom to withstand global turbulence, giving business the confidence to invest and leaving government freer to act when the situation calls for it.”
Afterwards, the pound fell to a seven-month low against the dollar in the wake of Reeve’s speech, hitting $1.31 at one point – the lowest since early April, when US trade tariffs shook global markets. Crucially, Reeves did not rule out a U-turn on Labour’s general election manifesto pledge not to hike income tax, VAT or National Insurance.
When asked if Labour were planning to break that promise to voters she claimed she was “setting the context for the Budget” and would come up a plan “for growth with fairness at its heart”.
But then declaring a vow to do what was “necessary to protect families from high inflation and interest rates, to protect our public services from a return to austerity” she ominously added that “we will all have to contribute to that effort”.
“Each of us must do our bit for the security of our country and the brightness of its future.”