Chancellor Rachel Reeves has indicated that higher taxes on the wealthy will feature in the upcoming November budget, as she dismissed criticism as “scaremongering” and emphasised her commitment to repairing the public finances. Speaking in Washington during the IMF annual meetings, Reeves told the Guardian that there “won’t be a return to austerity” and hinted at tax increases for the most well-off.
Reeves is expected to announce a package of tax rises on 26 November, in response to a downgrade in future growth forecasts from the Office for Budget Responsibility (OBR). When asked whether higher taxes on the wealthy would be included, she said “that will be part of the story.” She pointed to previous measures such as changes to non-doms and VAT on private school fees, arguing that past “bleating” about revenue shortfalls had proved unfounded.
The chancellor has ruled out a new “wealth tax,” but campaigners have suggested other options including raising capital gains tax, levying national insurance on rental income and partnerships, and creating higher council tax bands. There is also speculation she may overhaul tax-free Isas to encourage investment in UK stocks. Reeves declined to comment on specific measures but stressed the package would aim to boost economic growth.
Last year’s budget included a historic £40bn tax increase, which sparked a business backlash over higher national insurance contributions. Reeves noted that spending cuts are not planned, pointing to cost savings from new technologies, and reiterated that departmental budgets were set in the spending review. She hopes the budget will persuade bond markets to lower borrowing costs, contrasting her approach with that of the Conservatives and Reform party.
Reeves acknowledged the global economic volatility and said the British public understands the need for difficult decisions. She criticised the OBR for the timing of its productivity review, which adjusted forecasts after the spending review, saying it would have been better to update them earlier to give the new government a clearer picture.
