The chancellor increased taxes by £40bn in October, with the lion’s share funded by a £25bn rise in employers’ National Insurance.
Chancellor Rachel Reeves at the CBI’s conference (Image: Getty)
Rachel Reeves has failed to repeat her pledge that there will be no more borrowing or tax rises following her first Budget.
This is despite a £40billion tax-raising budget in October following a £25billion increase in employers’ National Insurance contributions.
The Chancellor last week sought to reassure business leaders there would be no repeat of the £40 billion tax hikes announced in her Budget, saying: “I’m really clear, I’m not coming back with more borrowing or more taxes.”
Today at Treasury questions, Conservative MP Nick Timothy told the Commons: “Last week the Chancellor told the CBI conference that she wouldn’t ‘come back with more borrowing or taxes’. Last Wednesday the Prime Minister hung her out to dry and refused to repeat those words.
“So will she repeat them today and rule out any more borrowing or any more taxes, yes or no?”
Ms Reeves replied: “At the Budget in October we had to fill the £22 billion black hole left by the previous government. We will never have to repeat a Budget like that because we won’t ever have to clear up the mess of the previous government ever again.”
The Chancellor at the budget insisted the tax rises would “fix the foundations and wipe the slate clean” and that this would be a one-off budget.
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Meanwhile Shadow Treasury minister Richard Fuller said the Government “seems to specialise in creating economic uncertainty”, adding: “With the latest being a delay in the date for the critical multi-year spending review.
“It looks like the Chancellor either doesn’t have a grip on her Cabinet colleagues’ spending plans or her own plans for public sector productivity. Which is it, or is it both?”
Chancellor Rachel Reeves, in her reply, said: “(Mr Fuller) talks about uncertainty when he was a minister in the Treasury under Liz Truss and the huge damage that did to family finances and business finances, so frankly I will take no lessons from him on how to run the economy.
“We’ve already done phase one of the spending review and phase two will begin very shortly and will be concluded next year, when we’ll be making multi-year settlements both on resource DEL (departmental expenditure limits) and capital budgets for the next few years.”
