‘We will all have to contribute’: chancellor refuses to rule out tax rises in Budget

The chancellor has refused to rule out tax rises in the upcoming Budget and said she would make “the choices necessary” to fix public finances.

In a speech in Downing Street this morning, Rachel Reeves said she would do “not what was popular, but what was right” when she sets out her tax and spending plans on 26 November.

She said millions of people across the country felt the economy was “not working as it should” but claimed her plans would help boost jobs.

“Mine will be a Budget for growth, with fairness at its heart, and a Budget that supports businesses to create jobs and to innovate,” she said.

Labour had pledged not to raise income tax, VAT or National Insurance in its general election manifesto. However, Reeves is widely expected to increase taxes on workers.

“If we are to build the future of Britain together, we will all have to contribute to that effort,” she added.

The chanceller said the Budget was needed to tackle the UK’s sluggish productivity rate, which meant “too many businesses and workers don’t have the tools that they need” and address the cost of living.

She said £1 in every £10 of taxpayers’ money is spent on paying debt interest, which limited how much the government could borrow.

Reeves said previous governments have not “adequately faced up to these challenges” and blamed austerity policies, Brexit and the pandemic for damaging growth.

“It’s my job to deal with the world as we find it, not the world as we want it to be,” Reeves added.

The hospitality industry was hit hard by tax rises on businesses in the last Budget, which was billed as a “once in a generation” event. At the time, Reeves said it was not a Budget the government wanted to repeat.

UKHospitality has warned that the sector is on track to have lost 111,000 jobs in just over a year by the end of November due to the impact of tax rises announced in the 2024 Autumn Statement.

Data from CGA and AlixPartners found that an average of two hospitality venues a day closed during the first half of 2025.

Hospitality bosses have also warned that more businesses could close if the chancellor goes ahead with a rumoured 50p per hour rise in the national living wage.

Photo: Sean Aidan Calderbank/Shutterstock