Chancellor Rachel Reeves hints at autumn tax rises as she warns of ‘tough choices’ ahead
RACHEL Reeves has again hinted at autumn tax rises as she warned of “tough choices” ahead to finance pay hikes for the public sector.
The Chancellor is set to open the purse strings to give 400,000 teachers and 1.4million NHS workers an inflation-busting 5.5 per cent rise this year.
She insisted that “there’s a cost of not settling” with unions threatening strikes if the hefty increase recommended by pay-review bodies is not passed on.
Ms Reeves says the cost — which could be up to £10billion — could protect any wider “impact on the economy”.
She told the BBC: “I don’t think anyone realised quite how bad things were.”
She added: “There is a cost to not settling, a cost of further industrial action, and a cost in terms of recruiting.”
Ms Reeves said Labour would do things the “proper way and make sure the sums add up”, adding: “[The Tories] weren’t willing to make tough decisions, they just ran away.”
Shadow Chancellor Jeremy Hunt, meanwhile, has called for “fiscal restraint”.
He will tell the Commons today: “With inflation at two per cent and the fastest growth in the G7, it won’t wash for Labour to pretend things are worse than they thought to lay the ground for tax rises.”
- MS REEVES refused again to budge on abolishing the two child benefit cap — saying she would not pledge the £3billion annual cost without knowing where the cash will come from.