Chancellor Rachel Reeves has confirmed she no longer stands by a pledge made last year not to raise taxes, citing a changed global landscape. In interviews ahead of her Labour Party conference speech in Liverpool, she pointed to wars in Europe and the Middle East, US tariffs, and higher borrowing costs as factors affecting the UK.
Speaking to BBC Radio 4's Today programme, Reeves said: 'Everyone can see in the last year that the world has changed, and we’re not immune to that change.' The commitment, made to the CBI in November 2023, ruled out further borrowing or tax increases beyond those in her first budget.
However, the chancellor strongly hinted that Value Added Tax (VAT) would not rise in November’s Budget. On BBC Breakfast, she stated: 'We made a commitment in our manifesto, and those commitments do stand.' She declined to explicitly rule out a VAT rise but said the manifesto pledge was made 'for a reason.'
Reeves also backed Prime Minister Keir Starmer’s description of Reform UK’s plan to retrospectively strip settled immigrants of their right to live in the UK as 'racist.' She distinguished between deporting those here illegally and removing lawful residents who contribute to society, such as colleagues and neighbours.
