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3h ago

Reeves Signals Possible Tax Rises in Pre‑Budget Downing Street Address

A Downing Street address prepared voters for tough tax decisions to rebuild fiscal headroom.

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
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
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Overview

  • Rachel Reeves said the 26 November Budget will prioritise protecting the NHS, cutting national debt and easing the cost of living.
  • She cited weaker public finances and a smaller fiscal cushion, with independent forecasts pointing to a shortfall of around £22 billion.
  • The Chancellor declined to rule out an income tax rise, and No 10 has not re‑committed to Labour’s manifesto promise on taxes for working people.
  • The Resolution Foundation’s proposal to raise income tax by 2p while cutting employee National Insurance by 2p is under discussion, alongside options such as higher property levies, threshold freezes and pension tax‑relief changes.
  • Analysts warn pensioners would shoulder more of the burden if income tax rises are paired with an NI cut, with AJ Bell estimating roughly £450 extra tax a year on a £35,000 retirement income.