Chancellor Rachel Reeves has said Britain is in a “very strong position” to absorb future economic shocks without resorting to further tax rises, despite £66billion of increases introduced across Labour’s first two budgets.
Speaking to Bloomberg at the World Economic Forum in Davos on Tuesday, Ms Reeves insisted the Government had “done enough on tax” and confirmed that no fiscal changes are planned for the spring statement.
The comments were aimed at reassuring households and businesses after two successive tax‑raising budgets.
“We don’t plan any tax changes in the spring,” she said, adding that the Treasury’s strengthened fiscal buffer should provide the stability the economy needs.
Ms Reeves pointed to decisions taken in November’s Budget, when she more than doubled the Government’s headroom against its fiscal rules, increasing the margin for error to £21.7billion.
“That has given greater confidence to people that we can have stability on a fiscal front,” she said.
The Chancellor also highlighted support from the International Monetary Fund, which she said had identified the UK’s programme as the fastest fiscal consolidation among G7 nations.
She argued that this endorsement placed Britain in a stronger position and reduced the likelihood of further tax increases.
Rachel Reeves ruled out tax changes in spring Budget
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GETTY
Ms Reeves used the Davos appearance to confirm changes to fiscal oversight arrangements.
Under the revised framework, the Office for Budget Responsibility will assess compliance with fiscal rules only once a year at the Autumn Budget, rather than conducting a second assessment alongside the spring forecasts.
Despite her emphasis on stability, the Chancellor acknowledged the wider global backdrop.
“The world has become a very uncertain place,” she said, adding that she would “not write future budgets today”.
Labour has implemented substantial tax rises since taking office
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SIMON DAWSON/NO10Labour has implemented substantial tax rises since taking office.
After the party’s first Budget in 2024, Ms Reeves said no further increases would be required.
That position shifted in November, when the Government introduced an additional £26billion of tax measures.
She has previously argued that the increases were necessary to support public services and fund infrastructure investment.
Taken together, Labour’s two autumn budgets have pushed the UK tax burden to its highest level since the Second World War.
The Government has already amended several policies following political pressure, including changes to inheritance tax rules affecting farms and adjustments to business rate reforms impacting pubs.
Ms Reeves said the Government’s focus is now on delivering fiscal stability within its existing tax plans.