Chancellor Rachel Reeves (Image: Getty)
Labour MPs fear Chancellor Rachel Reeves’s tax-raising Budget could kill off the party’s chances of winning a second election victory.
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The Chancellor was last night dubbed “Rachel Thieves” as she prepared to announce tax rises and spending cuts amounting to ￡40 billion, with voters facing higher bills for income tax and inheritance tax while firms are to pay more National Insurance.
But Liam Byrne, Chief Secretary to the Treasury in the last Labour government and now chairman of the House of Commons Business Committee, urged her to cut taxes instead.
He said: “Chancellor Rachel Reeves needs to use her Budget to restore fair play to the tax system and put up taxes on the super-wealthy so we can cut inheritance tax for ordinary working people.”
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Former environment minister Barry Gardiner warned getting the Budget wrong could end Sir Keir Starmer’s hopes of winning a second term in Number 10.
The Labour MP told the Sunday Express: “If Rachel Reeves’s Budget on October 30 is not bold and transformative then Labour will be leaving office again at the next election.”
Mr Gardiner called for a “Budget of national renewal” with borrowing to pay for infrastructure, and said the gloomy rhetoric being used to justify tax rises should be replaced by “hope and ambition”.
Their fears are echoed privately by other Labour MPs. One said: “It’s not about bad messaging, the problem is that we won power without knowing what we planned to do with it.”
Downing Street will attempt to present the Budget in an upbeat manner by releasing a report showing how the Chancellor’s decisions will help the Government achieve its key “missions”, including giving the UK the highest sustained growth in the G7.
But Tories accused Labour of breaking manifesto promises not to increase National Insurance or Income Tax.
Shadow Home Office Minister Matt Vickers said: “Dragging more people into tax and taking away the fuel allowance of millions of pensioners? Our new labour chancellor could well earn the name ‘Rachel Thieves’.”
Ten tax rises Rachel Reeves could announce
Inflation-busting increase in air passenger duty National Insurance increase for employers Ending the freeze on fuel duty Doubling betting duty for online bookmakers and casinos Raising more from inheritance tax Taxing more pension contributions and ending tax-free element of withdrawals Increasing capital gains tax Freezing income tax thresholds Higher stamp duty
And Nigel Huddleston, the Shadow Financial Secretary to the Treasury, claimed Labour had “tried to pull the wool over the public’s eyes”.
He said: “We stand on the verge of a fiscal event that will be a disaster for our country, and for the economy.”
The Chancellor is considering increasing National Insurance contributions from employers, a move Labour insists would not break a manifesto promise stating: “Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT.”
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Powered by
Angela Rayner among Labour ministers furious as 'biggest tax raid in history' mooted
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524 Comments
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28 Comments
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Rachel Reeves could plug ￡40bn gap with four 'possible' tax changes
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Rachel Reeves planning up to ￡40bn of tax rises and spending cuts in Budget
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181 Comments
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583 Comments
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108 Comments
National Insurance tax raid warning as expert warns Rachel Reeves could close 'loophole'
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Warning over Rachel Reeves' National Insurance worker pension 'tax on jobs'
3 Comments
Martin Lewis' ‘six-month warning' for Brits which could be worth thousands
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Don't let Labour pull the wool over your eyes! They are about to drop a bomb on your banks
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Labour civil war nears as Rayner and Reeves at loggerheads over social housebuilding funds
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ITV GMB's Susanna Reid skewers Rachel Reeves with brutal rant about manifesto 'lie'
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Rachel Reeves warned "jobs tax" will destroy business confidence
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Sir Keir Starmer National Insurance tax raid warning as worker pensions under threat
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Rachel Reeves could plug ￡40bn gap with four 'possible' tax changes
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Cabinet ministers told there is no more cash after backlash over spending plans
31 Comments
Rachel Reeves planning up to ￡40bn of tax rises and spending cuts in Budget
721 Comments
Rachel Reeves is using 'bogus' ￡40bn blackhole to hike up taxes
103 Comments
Rachel Reeves slams 'jobs tax' hike in resurfaced clip - as she now plans to do the same
181 Comments
Rachel Reeves achieves what no other Chancellor has - but she won't want to hear it
200 Comments
Drivers face ￡43 tax rise as Rachel Reeves plans massive Budget raid
5 Comments
Keir Starmer squirms as BBC reporter grills him over new tax hike threat
583 Comments
Angela Rayner among Labour ministers furious as 'biggest tax raid in history' mooted
108 Comments
National Insurance tax raid warning as expert warns Rachel Reeves could close 'loophole'
15 Comments
BBC Question Time forced to change show after huge Fiona Bruce blunder
251 Comments
Warning over Rachel Reeves' National Insurance worker pension 'tax on jobs'
3 Comments
Martin Lewis' ‘six-month warning' for Brits which could be worth thousands
Comments
Don't let Labour pull the wool over your eyes! They are about to drop a bomb on your banks
4 Comments
Labour civil war nears as Rayner and Reeves at loggerheads over social housebuilding funds
524 Comments
Ms Reeves is also set to announce she is extending a freeze on income tax thresholds, which was due to end in 2028, dragging up to 600,000 people into the higher 40% rate and increasing income tax in real terms for basic-rate payers.
The Chancellor faces a cabinet revolt over potential cuts to spending. Justice Secretary Shabana Mahmood, Transport Secretary Louise Haigh and Deputy Prime Minister Angela Rayner, the Housing Secretary, have written to the Prime Minister demanding a rethink.
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