Chancellor Rachel Reeves has made a direct appeal for unity among Labour MPs ahead of Wednesday's crucial Budget announcement, addressing restive backbenchers during a Monday night meeting of the Parliamentary Labour Party.
Call for Party Unity
The Chancellor emphasised that politics is a "team sport" as she sought support from colleagues who have grown increasingly concerned about anticipated tax increases. Ms Reeves told MPs she was proud of the forthcoming Budget statement, describing it as both a Labour and progressive package that shouldn't be treated like a "pick 'n' mix" selection.
She specifically warned against MPs choosing only the elements they favoured, using the analogy of liking "cola bottles" but disliking "fruit salad" to illustrate her point about the need for comprehensive support.
Budget Priorities and Economic Challenges
The Chancellor outlined three key priorities that will form the foundation of Wednesday's Budget: cutting the cost of living, reducing NHS waiting lists, and managing the cost of debt. These come against a challenging economic backdrop that includes expected tax hikes to address what Ms Reeves has long described as a black hole in public finances.
Adding to the pressure, the Office for Budget Responsibility is reportedly preparing to downgrade its economic growth forecast for every year until the next election in 2029. This revision, which affects productivity assumptions, will consequently reduce anticipated tax revenues, forcing difficult decisions on taxation.
Specific Tax Measures Under Consideration
Among the specific measures being widely anticipated, the Chancellor may introduce a levy on high-value properties worth more than £2 million, potentially affecting over 100,000 properties and raising between £400-£450 million annually. The Times reported that approximately 2.4 million properties in the top three council tax bands would be revalued to determine which would be subject to this new surcharge.
Additionally, Ms Reeves is expected to extend the freeze on income tax thresholds The Chancellor faces pressure from multiple directions, with business leaders urging caution about additional burdens on enterprises. Rain Newton-Smith, head of the Confederation of British Industry, warned against inflicting "death by a thousand taxes" on British businesses and called for the government to "change course" in its approach. Despite suggestions from Ms Reeves that there might be surprises in the Budget statement, a Treasury spokesman later clarified that the era of "rabbits out of a hat" is over, indicating a more straightforward approach to fiscal announcements. Concluding her address to Labour MPs, the Chancellor promised a "fair Budget" that would "deliver strong foundations, secure our future and deliver on our promise of change" when she presents it to the Commons on Wednesday.External Pressures and Business Concerns
