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2h ago

Reeves Pressed to Break Tax Pledge as CBI Calls for Headroom and Blair Institute Seeks Temporary Hikes

Calls to create fiscal headroom now test Labour’s tax pledge.

Britain's Chancellor of the Exchequer Rachel Reeves takes journalists' questions after delivering a speech in the media briefing room of 9 Downing Street, central London, on November 4, 2025, ahead of the forthcoming Budget. JUSTIN TALLIS/Pool via REUTERS/File Photo
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Britain's Chancellor of the Exchequer Rachel Reeves delivers a speech in the media briefing room of 9 Downing Street, central London, on November 4, 2025, ahead of the forthcoming Budget. JUSTIN TALLIS/Pool via REUTERS
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Overview

  • Chancellor Rachel Reeves refused to recommit to Labour’s promise not to raise income tax, national insurance or VAT, telling a pre‑Budget audience that “we will all have to contribute” ahead of the 26 November statement.
  • The CBI urged the government to prioritise building fiscal headroom and to avoid further business tax rises, saying personal tax changes may be unavoidable to support growth and investment.
  • Sir Tony Blair’s institute said any manifesto‑breaching tax increases should be temporary and paired with pro‑business reforms, with a goal of reversing them before the next election as growth improves.
  • Independent institutes have highlighted a sizable shortfall, with NIESR recommending roughly £30 billion of headroom and the Resolution Foundation estimating tax measures of about £26 billion could be needed to meet rules.
  • Political tension is rising as left‑wing Labour MPs warn against higher taxes on workers and reports point to cabinet unease, while business leaders describe mounting anxiety about the prospect of broad tax increases.