Rachel Reeves has sparked fresh tax hike fears after refusing to rule out breaking a major Labour manifesto promise in the upcoming Budget.
Ahead of the election last year, Sir Keir Starmer and Ms Reeves promised not to raise taxes on “working people”.
However, there is speculation that the Government is considering a tax rise later this year to bring in money.
When asked directly by Times Radio whether she had any plans to increase VAT, the Chancellor said: “I am being clear. We made those commitments in the manifesto, and those manifesto commitments stand.
“We went through all of this in the general election 15 months ago where people said ‘are you going to rule this out? Are you going to do this?’
“We made those commitments in the manifesto. We were elected on those manifesto commitments, and those manifesto commitments stand because I want to make working people better off.
“Judge me on my record, because last year at the budget, people said, ‘Oh, you’re not going to be able to honour your manifesto commitments’, well, we did increase taxes in the budget last year, but without hitting the payslips of ordinary working people.”
It comes as the Prime Minister also failed to rule out whether the Government will break the promise over fresh fears Labour will have to find £30billion at the Budget.
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Sir Keir has left the door open to tax rises
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PAMs Reeves is awaiting the first official forecasts from the budget watchdog on the state of the economy, which the Treasury is expected to receive later this week.
The Office for Budget Responsibility (OBR) is set to warn Ms Reeves that she will have to find about £30billion in further revenues or savings as a result of higher borrowing costs, as well as policy U-turns and forecasted future economic growth.
At the Labour Party Conference, the Chancellor said she would have to make “harder choices” but insists she will “take no risks” with the British people’s trust.
She said: “I will make my choices at that Budget. They will be choices to take our country forward.
“And whatever tests come our way, whatever tests come my way, I make this commitment to you: I will take no risks with the trust placed in us by the British people.”
She expressed that Labour’s second year in power “must be about building a renewed economy”.
Ms Reeves told Labour’s Party Conference there was “nothing progressive, nothing Labour, about Government using one in every £10 of public money it spends on financing debt interest”.
She said there will be “further tests” ahead for the UK, with the choices being faced.
Rachel Reeves said Labour’s second year ‘in power must be about building a renewed economy’
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PA
Ms Reeves said: “In the months ahead, we will face further tests, with the choices to come made all the harder by harsh global headwinds and the long-term damage done to our economy, which is becoming ever clearer.
“Our first year in power was about fixing the foundations. Our second must be about building a renewed economy for a renewed Britain: A renewed economy that works for working people and rewards their contribution.
“A renewed economy, where we reject austerity and support public services.
“A renewed economy that supports investment, that gets inflation and borrowing down and where we build for growth in every part of Britain.”