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A senior cabinet minister has admitted that public finances are in a “challenging situation” amid speculation Rachel Reeves Tax hike could hit the rich Budget,
Health Secretary Wes Streeting Admitted there were some issues with the economy and said families were also feeling the pressure.
But he insisted there were “green shoots” of economic recovery, “but we are not out of the woods yet”.
The Mail on Sunday reported that Ms Reeves is considering a new mansion tax, which would give owners of properties valued at more than £2 million an annual fee of 1% of that amount, which would mean a levy of £10,000 a year for homes worth £3 million.
The Sun on Sunday suggested she was considering announcing a 2p income tax rise.
Mr Streeting said he would not focus on “wild speculation about the budget” ahead of Ms Reeves’ statement next month.
“We will wait,” he told GB News. chancellor To determine its budget. People can see that public finances are in a challenging situation.
“The economy is the same, but family finances are the same, business finances are the same, we believe, we have to get our economy growing again.”
Britain’s economic growth was the fastest in the G7 in the first quarter of 2025, but International Monetary Fund (IMF) forecasts show the US will overtake Britain for the full year.
Mr Streeting said: “There have been some encouraging signs in terms of interest rates and the UK is projected to be the fastest growing economy in the G7, all of which are cause for encouragement.
“But we are not out of the woods yet. The Chancellor has got a challenging job. She has a lot of considerations to balance and she will make her choices during the Budget, not before.”
Mr Streeting told Sky News: “I think there is scope for improvement in the NHS, in the economy, in our public services, but there is still a lot to do, and we have to attack those challenges with the level of energy and focus that the scale of the challenge demands.”
Ms Reeves is likely to face tax increases and spending cuts to plug the shortfall in public finances when she presents her budget on November 26.
Economists have suggested that they will need to find between £20 billion and £50 billion to meet their target of balancing day-to-day spending with tax receipts in 2029/30, and at least maintain their existing buffer of around £10 billion against that target.
Ms Reeves has indicated that the task will be made more challenging by the Office for Budget Responsibility reducing its assessment of productivity growth.
The historically small buffer Ms Reeves has left herself against the fiscal rules she has imposed means it could be wiped out by relatively minor changes to budget forecasts, leaving her scrambling for savings or extra tax revenue.
Lord King, former Governor of the Bank of England, was critical of the Chancellor’s “back of a fag packet” approach.
He told Sky News’ Sunday Morning with Trevor Phillips: “You can’t solve that problem by just adding another wealth tax to it.”
He suggested that if Ms Reeves wanted to look at the tax system she should appoint a panel of experts to examine the issues and take the time to “come up with a coherent approach”.
But he added: “That doesn’t seem to be happening. What happens is that the OBR produces a number, a number, just before the Budget, and then they look for ideas, you know, almost written on the back of a fag packet, about how you can raise an extra billion or a few billion there.
“It’s not a consistent tax strategy. And you can do a lot more by thinking about it first.”