As the UK braces for the upcoming Budget on November 26, Chancellor Rachel Reeves has warned that difficult decisions lie ahead, leaving Brits concerned about potential tax increases.
Speaking at Labour’s annual conference, Reeves emphasized her commitment to keeping taxes “as low as possible” while navigating challenging global economic conditions.
“I will make my choices at that Budget. They will be choices to take this country forward,” she told delegates, adding that she would take no risks with the trust placed in the government by the British people.
Labour Officials Caution Manifesto Commitments May Shift
Amid mounting speculation about a potential £30 billion gap in government finances, Labour officials have acknowledged that some manifesto promises may not be set in stone.
No10 enforcer Darren Jones clarified that pledges on income tax, national insurance, and VAT stand “today,” but final decisions have yet to be made.
Reeves also subtly criticized Greater Manchester Mayor Andy Burnham’s idea of confronting bond markets, arguing that piling on debt is “nothing progressive.”
Attacking Farage and Reform Party Policies
In her address, Reeves singled out Nigel Farage and the Reform Party as a “threat” to working people, accusing them of exploiting division rather than promoting national well-being.
She urged party activists to stay committed, insisting, “A better Britain is in reach.”
Her remarks briefly faced interruptions from audience members chanting about Palestinian issues, to which she responded that Labour is “a party in government, not a party in protest.”
Promoting Patriotism and Investment
Reeves highlighted her support for the UK steel industry and criticized Thatcher-era policies that left poorer children behind.
She called for a nation built on contribution, investment, and fairness. She pledged:
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A library in every school across the country
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Cooperation on a UK-EU “youth mobility” deal
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Policies aimed at building a renewed economy that works for working people
She stressed that Labour’s focus should remain on reducing inflation, borrowing, and inequality while stimulating growth across all regions.
Facing Global and Domestic Headwinds
Acknowledging the economic pressures from both global conditions and long-term domestic challenges, Reeves said the government’s second year in power must focus on economic renewal.
“We’ve turned our backs on the path of decline, and we’ve chosen investment, but there is further to go,” she told the conference.
She also insisted that Labour should avoid repeating mistakes of the past by over-relying on austerity, emphasizing that a thriving public sector and infrastructure investment are essential.
Balancing Tax and Spending Decisions
With an estimated £30 billion black hole in public finances, Reeves avoided specific commitments on VAT or other tax changes.
She noted that any adjustments would likely involve a mix of tax and spending measures.
“The International Monetary Fund has recommended one major fiscal event a year, and we’re aligning with that,” Reeves explained, signaling potential reforms to the Office for Budget Responsibility’s forecast schedule.
Party Divisions and Union Pressure
Reeves’ warnings come as Labour faces internal pressure, with unions like Unite expected to push for wealth taxes and potential policy shifts if the upcoming Budget fails to signal a “direction change.”
The Chancellor’s speech attempted to reassure delegates that, despite low poll ratings and a stalling economy, the government remains focused on fiscal responsibility, investment, and supporting working people across the UK.