MANCHESTER, England, Nov 10 (Reuters) – Britain’s Labour government could keep its pledge not to raise taxes on working people only by taking harmful measures like deep cuts to investment, finance minister Rachel Reeves said on Monday.Her comments represent the clearest sign yet that she will raise tens of billions of pounds in taxes in her November 26 budget to stay on track for her fiscal targets, a key issue for bond investors.
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Ahead of its July 2024 landslide election, Prime Minister Keir Starmer’s Labour Party promised in its manifesto, opens new tab that it would not raise taxes on working people, including income tax, social security contributions, or value-added tax.”It would of course be possible to stick with the manifesto commitments, but that would require things like deep cuts in capital spending,” Reeves told BBC radio.She said she was working on both tax and spending measures in the budget, adding that she would not give more details ahead of November 26.
ECONOMIC TRUST
Last week the Times newspaper reported that Reeves told the budget watchdog that a rise in personal taxation is among the “major measures” she is preparing to announce in her budget.Labour won last year’s July election on a platform of economic trust, a little over a year-and-a-half after the previous Conservative government, then led by Liz Truss, sent the markets into a tailspin with a series of unfunded measures in a “mini-budget” announcement in September 2022.”What I promised during the election campaign was to bring stability back to our economy, and what I can promise now is I will always do what I think is right for our country – not the particularly easy choice, but the … things that I think are necessary,” Reeves said.After a first year in power marred by missteps and resignations, Labour trails the right-wing Reform UK in opinion polls and is under pressure to improve living standards.
Reporting by Andy Bruce; Editing by Kate Holton
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