Chancellor Rachel Reeves has given a press conference to set “the context for the Budget”, signalling that she is preparing the country for tax hikes.
Speaking three weeks before the Autumn Budget announcement on November 26, Reeves pledged to make “the choices necessary to deliver strong foundations for the economy”.
She noted that “the easy thing to do would be to cut investment”, but those decisions “are the reason we have such low productivity today”.
Reeves accused Tory politicians of being “irresponsible” by pushing for “easy answers” in the past, referring to administrations making spending cuts rather than raising taxes.
The Labour Party had a pre-election manifesto promise not to increase not to increase income tax, national insurance or VAT, though Prime Minister Keir Starmer refused to confirm the Budget will honour these pledges at Prime Minister’s Questions last week.
Rachel Reeves raised national insurance tax on businesses in last year’s Budget.
The Office for Budget Responsibility is expected to downgrade its productivity growth forecast for the UK by around 0.3%, which could bring Reeves’ ‘fiscal black hole’ from £22bn to up to £30bn, according to Sky News.
In the property market speculated tax rises could come in the form of a Mansion Tax on properties worth over £2 million.
There is also talk of stamp duty being removed and replaced with a tax for properties over £500,000.
Nathan Emerson, chief executive at Propertymark, said: “With increasing speculation about potential tax rises, it is crucial that careful consideration is given to avoid hampering growth within the housing market, as it is a central engine of the economy.
“It is encouraging to hear the Chancellor state that her Autumn Budget is aimed at boosting productivity. Any measures designed to ease the cost of living and positively impact the housing market would be very welcome news for consumers.”