Chancellor refuses to rule out tax rises in November's budget

The UK chancellor has refused to rule out tax rises in the upcoming budget at the end of November.

Rachel Reeves took the unusual step of delivering a “scene setter” speech on Tuesday, three weeks ahead of her Budget.

During the course of her 45-minute speech, Reeves declined to recommit to Labour’s manifesto commitments not to raise income tax, national insurance or VAT, saying “we will all have to contribute”.

“As I take my decisions on both tax and spend, I will do what is necessary to protect families from high inflation and interest rates, to protect our public services from a return to austerity and to ensure that the economy that we hand down to future generations is secure with debt under control,” Reeves said.

“If we are to build the future of Britain together, we will all have to contribute to that effort.

“Each of us must do our bit for the security of our country and the brightness of its future.”

Economists have estimated that Reeves will have to find billions to plug a black hole caused by U-turns on welfare spending cuts and increased debt interest costs.

The chancellor also blamed global problems, including the tariff war triggered by US President Donald Trump and domestic issues, including the budget watchdog’s expected downgrade of economic productivity, for the “hard choices” she will make.

She added that it is “already clear that the productivity performance that we inherited from the last government is weaker than previously thought”, which “has consequences for the public finances” in terms of lower tax revenue.

However, Reeves reiterated an “ironclad” commitment to her fiscal rules and a commitment to bring debt down.

The chancellor will unveil the next UK Budget on Wednesday, November 26.