In a rare speech three weeks before the event, the Chancellor warns of the need for “hard choices” and the “unsustainability” of the public finances ahead of the much-anticipated Autumn Budget
Rachel Reeves has warned the nation that tax increases are on the horizon in her Budget, declaring “each of us must do our bit”.
The Chancellor refused to reaffirm Labour’s manifesto pledges not to increase income tax, national insurance or VAT, insisting “we will all have to contribute” during an unusual pre meeting ahead of her official autumn Budget later this month.
This morning, she also pointed to international challenges including the trade war sparked by US President Donald Trump and domestic concerns including the budget watchdog’s anticipated downgrade of economic productivity for the “hard choices” she will implement.
Ms Reeves took the rare step of delivering a speech three weeks before her Budget to lay the groundwork for the anticipated tax hikes she will unveil.
Speaking from Downing Street she declared: “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.
“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.”
Previously, Labour was called on to double the ISA allowance amid reports Reeves would slash it in the Autumn Budget. However, a banking chief has urged her to reverse course entirely.
Currently, savers can deposit up to £20,000 annually into ISAs whilst maintaining their tax-free status. With ISAs, you’re exempt from paying any tax on interest earnings or investment growth within the account.
Danny Haynes, chief product officer at Kroo Bank, said: “We would suggest that, as soon as public finances allow, the tax-free ISA limit should be doubled to encourage saving and investments.”
The bank called for the Government to introduce policies to help savers “put their money to work” through savings accounts, ISAs and investments.
Mr Haynes said: “The Bank of England found that over £1trillion of the public’s money is earning less than 2 percent interest – making wealth growth difficult, and harming business success as a result. This is the primary issue that must be addressed, especially in times of economic uncertainty.”
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