Rachel Reeves calls for Labour unity as make-or-break Budget looms
Rachel Reeves sought to rally the Labor troops on Monday night, urging them to support this week’s Budget, which is expected to include a ‘smorgasbord’ of tax rises.
The Chancellor is expected to present his budget to the House of Commons on Wednesday, where he is expected to pull the lever on tax increases to fill public coffers.
Ms Reeves addressed restless Labor supporters on Monday night, calling for unity as she urged them to support her plans for the economy.
Many Labor MPs have become increasingly frustrated with the prospect of tax rises on the horizon at a time when their party’s opinion polls are slipping with less than two years left in government.
At a Labor Party meeting in Parliament, Ms Reeves told MPs that politics was a “team sport”.
The Chancellor’s decision to remind MPs of this was “because united parties are the ones who win elections”, according to a Treasury spokesman.
Ms Reeves also described the Budget as a “package” rather than a “pick and mix” and urged MPs to support it in its entirety rather than singling out parts they don’t like for criticism.
He suggested Labor’s supporters would probably be happy with 95 per cent, while pointing to difficult political decisions yet to be announced.
The Chancellor also told MPs the Budget will focus on three priorities: “Reducing the cost of living, shortening NHS waiting lists and reducing the cost of debt.”
Ms Reeves is said to face a more difficult economic outlook in the medium term; Sky News reported that the Office for Budget Responsibility has cut its biennial growth forecast ahead of the next election in 2026 and 2029.
The downgrade and subsequent reduction in tax revenues will force the chancellor to raise taxes to balance the books and create a larger buffer against future shocks than the historically low headroom he has previously reserved for himself.
Ms Reeves, who is preparing to implement what has been described as a “smorgasbord” approach to raising the tax, could hit high-value properties with a new tax applicable to those worth more than £2 million, raising £400-450 million, according to reports.
But he had already been warned about the effects of the so-called “mansion tax” if it was applied incorrectly.
Economist Paul Johnson, formerly of the influential Institute for Fiscal Studies think tank, said: Me Paper A full reassessment of council tax was needed, rather than simply increasing the top tax bands.
Scottish Labor leader Anas Sarwar described the Budget as “a moment to restore confidence and get the Labor government back on track”.
Don’t write IndependentHe said: “Ultimately, both voters and businesses will benefit from the decisions taken by the UK Labor government.
“The tragedy is that failure to project confidence and communicate these changes leaves them feeling uncertain. But if we don’t take action to boost business confidence, then we will remain stuck in the doomed cycle of speculation, timidity and short-termism that is holding our economy back.”
