Rachel Reeves speech live: Chancellor to pave way for tax hikes in major pre-Budget speech

Tax rises are “inevitable”, a leading think tank has warned, hours before Rachel Reeves announces her Budget priorities.

The Solution Foundation said it was a way to implement “inevitable” tax increases that would “increase confidence in the economy and public finances, while also reducing child poverty and the cost of living”.

In its pre-budget review, the Resolution Foundation said the Chancellor should aim to double his fiscal share in his statement to the House of Commons on 26 November.

This would result in the buffer against unexpected changes in economic downside rising to £20bn, although the think tank conceded a £15bn increase was “perhaps” more realistic.

“This would send a clear message to markets that it is serious about fixing public finances, which would reduce medium-term borrowing costs and make future financial events less worrying,” the report said.

Rachel Reeves will promise a “fairness and opportunity” budget amid speculation she is preparing to raise income tax to plug a gap in public finances.

In a speech in Downing Street on Tuesday, the Chancellor is expected to say he will “make the choices necessary to create strong foundations for our economy” for “years to come”.

Prior to his statements, No 10 had repeatedly refused to recommit to Labour’s manifesto commitments; This fueled speculation that his promise to avoid an increase in income tax would be broken.

Ms Reeves is expected to set out three key priorities – reducing the national debt, easing the cost of living and protecting the NHS – adding: “This will be a Budget guided by the Government’s values ​​of fairness and opportunity and focused squarely on the priorities of the British people.

“You have all heard a lot of speculation about the choices I will make. I understand that these are important choices that will shape our economy for years to come.”

“But it is important for people to understand the circumstances we face, the principles that guide my choices, and why I believe they will be the right choices for the country.”

The speech is an attempt to change the field for a tough autumn statement on November 26, when the Chancellor is widely expected to raise taxes to balance the books in the face of weak growth and high borrowing costs.

Economists at the Institute for Fiscal Studies have already estimated that he will need to find £22bn to regain the £10bn gap he has left against his previous self-imposed debt targets.