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Rachel Reeves Has suggested that higher taxes on the rich will be part of his budget next month.
The Chancellor was speaking in Washington on Wednesday, when she admitted she was considering possible tax increases and spending cuts to plug her budget shortfall, which she said was partly due to the impact of Brexit.
It comes amid speculation over what steps she will take to plug the estimated £50m blackhole Cash ISA allowance cut Reportedly for savers among the ideas.
Asked whether higher taxes on the rich would be part of her November 26 statement, Ms Reeves, who was in the US for an International Monetary Fund (IMF) meeting, said: “It will be part of the story.
“There will be no return to austerity in next month’s Budget. We know we are facing a changing global environment in terms of the economy at the moment.”
He also said that last year fear was spread over his decisions, which hit the pockets of the rich.
She said: “Last year, when we announced things like non-doms, like (tax increases for private equity), VAT on private school fees, there was so much noise that this was not going to raise money – that people would leave.
“The Office for Budget Responsibility Will publish updated numbers on all those things. And that intimidation has been to no avail, because this is a wonderful country and people want to live here,” she said.
The budget is expected to include spending cuts and tax increases, which he attributed to the “severe and long-lasting” impact of Brexit on the economy.
With no rebound in economic growth, extremely high inflation and the rising cost of government debt, Ms Reeves will have to fill a black hole estimated by some economists at £50 billion.
On Wednesday, Labor promised to stick to its pre-election pledge not to increase VAT, income tax or national insurance payments.
Before leaving for the US, he told Sky News that “of course, we are looking at tax and spending”.
She confirmed that the budget watchdog has “consistently overestimated” UK productivity, with a potential decline from its previous estimates making Ms Reeves’s job even more difficult.
Asked whether she was now in an “unfortunate cycle” of continually raising taxes to plug the black hole, Ms Reeves said she wouldn’t use those words but “nobody wants this cycle to end more than me”.
He said, “Challenges are coming our way, be it geopolitical uncertainties, conflicts around the world, increased tariffs and trade barriers and now this review is looking at how productive our economy has been in the past and then taking it forward.
“But I will not ignore those challenges. Of course, we are also looking at tax and spending, but as Chancellor the numbers will always stick with me because we saw just three years ago what happens when a government, where the Conservatives lost control of the public finances – inflation and interest rates hit rock bottom.”
He said reforming the planning system would help “bring manufacturing back to Britain”.