Conservatives React Furiously to Rachel Reeves’ Tax Rise Warning for Autumn Budget Following Allegations of Labour’s £22 Billion ‘Black Hole’

Rachel Reeves, the Chancellor, stirred controversy yesterday with a stark warning about impending tax increases in the upcoming autumn Budget.

Previously, during the election campaign, both she and Sir Keir Starmer had steadfastly maintained that there were no plans for tax hikes beyond those outlined in Labour’s manifesto.

However, in a dramatic turnaround, Reeves cited the dire state of public finances, indicating that additional taxes would be necessary come October 30.

This announcement sparked a furious response from the Conservatives, who accused Labour of leaving a £22 billion ‘black hole’ of unfunded spending commitments.

Reeves faced further criticism for axing the winter fuel payment for 10 million pensioners.

Defending her stance, she emphasized the financial shortfalls inherited from the previous government, necessitating future tax rises and spending cuts.

Speaking on the News Agents podcast, Reeves acknowledged the tough decisions ahead, hinting at potential measures affecting pensions in the Budget.

When pressed about specific cuts to pension tax relief on LBC Radio, she declined to confirm details but reiterated Labour’s manifesto commitments to avoid increasing National Insurance, VAT, or income tax.

Hunt Calls for Investigation Amid Accusations

Meanwhile, Jeremy Hunt called for an investigation into Reeves’s claims that he misled the public about the state of public finances during his tenure at the Treasury.

He described her accusations as ‘deeply troubling’ and wrote to the Cabinet Secretary, disputing the existence of a £22 billion deficit.

Hunt pointed to recent government spending estimates as proof that the claims made by Reeves were unfounded and potentially damaging to the reputation of the civil service.

Labour’s Spending and Future Challenges

Highlighting Labour’s spending since taking office, including substantial increases such as a 22% pay rise for junior doctors, Hunt asserted that the cumulative commitments now totaled £24 billion.

He raised concerns over the sustainability of such expenditures, equating them to £1 billion per day.

This sequence of events underscores the contentious debate surrounding fiscal policy and government transparency as both parties gear up for critical decisions in the months ahead.