Chancellor Rachel Reeves has signalled that tax rises are being considered for next month's Budget during her visit to Saudi Arabia. Speaking at Fortune Magazine's global forum in Riyadh, she indicated the Government needed to ensure "sufficient headroom" above its spending plans whilst meeting fiscal rules.
Reeves did not rule out tax increases when directly asked whether they formed part of Budget considerations. She told the conference: "The underpinning for economic growth is stability, and I'm not going to break the fiscal rules that we've set."
Budget pressures mount
The Chancellor faces significant financial pressures with the Institute for Fiscal Studies estimating she needs £22 billion in tax rises or spending cuts to meet her self-imposed fiscal rule. Labour's manifesto commitment not to raise income tax, national insurance or VAT reportedly "stands", though Reeves recently said she was still "going through the process" of writing the Budget.
When asked about claims the Treasury was considering income tax increases, she said she would "continue to support working people by keeping their taxes as low as possible". The Budget announcement comes amid expectations of tax increases to address the fiscal deficit.
Trade deal optimism
Reeves expressed confidence about finalising a trade deal with the Gulf Co-operation Council during her Saudi visit. The Treasury estimates such an agreement could add £1.6 billion to the UK economy and contribute £600 million to workers' annual wages long-term.
She acknowledged arriving "a little bit late" to her conference event due to "really good meetings" about the deal. Reeves told attendees she was confident the GCC deal could be completed.
Wealthy taxpayer stance
On potential higher taxes for the wealthy, the Chancellor emphasised that growing the economy offered "another way to improve the fiscal position". She defended the Government's approach when questioned about wealthy individuals leaving Britain for other countries.
"Everyone who makes Britain their home should contribute," Reeves said, adding: "We don't want to drive anyone out of the UK, but we do want to make sure that we tax people fairly, people who make Britain their home, whichever country they or their parents are originally from."
Sources used: "PA Media" Note: This article has been created with Artificial Intelligence (AI).
