Chancellor Rachel Reeves has admitted that the Labour government has disappointed some Brits after it raised £40bn in taxes at last year’s Autumn Budget.
The Labour government have come under fire for its high-tax and high-spend policies in power despite claiming it would be more business-friendly during electoral campaigns last year.
Now Rachel Reeves has admitted that Labour has let some groups across the UK down since it came to power last year, with her job as Chancellor likelier to take the flak for unpopular decisions.
Speaking on the Iain Dale Talk show in Edinburgh, Reeves said it was critical to balance the books when increasing government spending.
“Of course you’re going to disappoint people. No one wants to pay more taxes.
“Everyone wants more money than public spending – and borrowing is not a free option, because you’ve got to pay for it.
“I think people know those sort of constraints, but no one really likes them and I’m the one, I guess, that has to sort the sums up.”
In a further sign that Reeves may not introduce a wealth tax or target the richest in the UK, she said her party had got the balance on tax and spending “about right”.
On Friday, Reeves pointed to extra taxes on former non doms, private jets and second homes as evidence that Brits with the “broadest shoulders” were paying their fair share.
Her comments appeared to be a rebuke of a proposal by former Shadow Chancellor Anneliese Dodds to introduce a wealth tax.
“Decisions around tax are decisions that are made at a budget and we’ll make those decisions in the appropriate way, but the number one priority of this government is to grow the economy,” Reeves said.
“That means bringing more investment into Britain, creating more good jobs paying decent wages here in Britain. We’ve got to get the balance right on taxation because we want that investment.
“We want those jobs to come here.”
Rachel Reeves’ expected tax raid
City analysts believe Rachel Reeves could have to raise as much as £30bn in taxes later this year.
Pension contributions and freezing income tax thresholds, which is otherwise referred to as a “stealth tax”, have been mooted as possible targets for Reeves in the autumn.
Taxes could help fill a £10bn shortfall in public finances, with her headroom standing £9.9bn at this year’s Spring Statement.
JP Morgan analysts expect Reeves to build a smaller headroom, which could risk exacerbating tensions with bond markets.
But when she was speaking at the Edinburgh Fringe event, the Chancellor called for Brits to be more lenient on the Labour government given its inheritance from the Conservatives.
“The reason people voted Labour at the last election is they want to change and they were unhappy with the way that the country was being governed,” Reeves said.
“They know that we inherited a mess. They know it’s not easy to put it right, but people are impatient for change.
“I’m impatient for change as well, but I’ve also got the job of making sure the sums always add up – and it doesn’t always make you popular because you can’t do anything you might want to do.
“You certainly can’t do everything straight away, all at once.”