Chancellor Rachel Reeves (Labour) has confirmed wealthy people will face higher taxes in next month's Budget, giving her strongest hint yet during an interview at International Monetary Fund meetings in Washington. She said tax rises on the rich would be "part of the story" in the November 26 statement.
Reeves dismissed concerns about wealthy people leaving the UK, pointing to the success of previous measures targeting the affluent. She said there had been "scaremongering" over decisions like non-dom taxes, private equity tax increases, and VAT on private school fees, but "that scaremongering didn't pay off, because this is a brilliant country and people want to live here."
Filling the fiscal black hole
The Chancellor is scrambling to fill a multibillion-pound black hole in public finances through a combination of tax rises and spending cuts. She confirmed the budget watchdog had "consistently overestimated" the UK's productivity, with expected downgrades likely to make her task even harder.
Reeves blamed the fiscal challenges on the lingering impacts of Brexit, austerity policies, and Liz Truss's mini-budget. The National Institute of Economic and Social Research suggests she needs to find around £50 billion annually by 2029-39 to meet her goals, though Reeves rejected this claim.
UK tax burden rising
Only the Daily Mail reports the UK is on track for the fastest tax rise pace in the G7, with revenues rising from 38.3% to 40.6% of GDP by 2029. Meanwhile, research from Rathbones suggests a wealth tax could drive £100 billion in assets abroad with significant setup and administration costs.
Property wealth has increased by £6 trillion over the past decade but remains largely untaxed, according to The i. The Institute for Fiscal Studies warns the Chancellor needs £42 billion to avoid "fiscal groundhog day" and build proper headroom.
Economic pressures mount
Official figures showed muted economic growth, with GDP rising just 0.1% in August following a revised 0.1% contraction in July. The IMF warned UK inflation is set to surge to the highest in the G7 in 2025 and 2026, though Britain is expected to be the second fastest-growing G7 country this year.
Reeves insisted she wouldn't get "stuck in a doom loop" of annual tax rises. She said: "Nobody wants that cycle to end more than I do. That's why we're putting all the effort into growing our economy because that in the end is what brings in the tax revenues."
Sources used: "The Guardian", "Mirror", "Daily Mail", "Manchester Evening News", "The i", "City A.M."
Note: This article has been edited with the help of Artificial Intelligence.
