Chancellor Rachel Reeves has given her biggest indication yet that tax rises will be included in this year’s Autumn Budget, following the Labour Government’s “damaging” U-turn on Personal Independence Payment (PIP) reforms in the Welfare Bill earlier this week.
After dropping key welfare reforms, analysts have warned the Treasury will need to plug a £5billion “black hole” in the public finances if the Chancellor’s strict fiscal rules are to be kept.
Prime Minister Keir Starmer’s Government were forced to axe an introduction of strict eligibility rules for the disability benefit after intervention from backbench Labour MPs, with Reeves warning “there are costs to what happened”.
When asked about potential tax raids by The Guardian, the Chancellor said: “I’m not going to, because it would be irresponsible for a Chancellor to do that.
The Chancellor has hinted tax rises are on the horizon
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“We took the decisions last year to draw a line under unfunded commitments and economic mismanagement. So we’ll never have to do something like that again. But there are costs to what happened.”
Despite signaling a likely HM Revenue and Customs (HMRC) raid, the Chancellor hinted that her strict fiscal rules will likely remain in place, asserting Labour will “continue to keep that grip on the public finances”.
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Prime Minister Keir Starmer’s Government has been forced to U-turn on the benefits bill
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