Chancellor Rachel Reeves has directly confirmed that tax and spending changes remain under consideration for next month's Budget during her visit to Saudi Arabia. Speaking at Fortune Magazine's global forum in Riyadh, she indicated that some form of tax rises could be necessary to ensure "sufficient headroom" above spending plans.
When directly asked whether tax rises were being considered as part of Budget preparations, Reeves did not rule out the possibility. She told the conference: "The underpinning for economic growth is stability, and I'm not going to break the fiscal rules that we've set."
The Chancellor emphasised her commitment to reducing the deficit and controlling debt levels. "We are going to reduce that primary deficit, we are going to see debt starting to fall as a share of GDP, because we need more sustainable public finances, especially in the uncertain world in which we live today," she said.
Growth-focused fiscal strategy
Reeves positioned economic growth as central to her Budget approach, stating: "So growth will be a big part of that Budget story, in a way that, frankly, I think growth has been neglected as a tool of fiscal policy in the last few years." She faces pressure to find £22 billion in tax rises or spending cuts according to Institute for Fiscal Studies estimates.
The Chancellor confirmed the Government was examining both taxation and expenditure options. "But we are looking, of course, at tax and spending to ensure that we both have resilience against future shocks by ensuring we've got sufficient headroom, and also just ensuring that those fiscal rules are adhered to," she explained.
Trade deal optimism
Reeves expressed strong confidence about finalising a trade agreement with the Gulf Co-operation Council during her Saudi visit. She acknowledged arriving "a little bit late" to her conference event, explaining this was due to "really good meetings" about the potential deal.
The Chancellor told attendees she hoped they "will agree that's worth it, if we can get that GCC deal over the line". She later added with confidence: "And yes, I am confident that we can get that deal over the line."
The Treasury estimates such an agreement could add £1.6 billion to the UK economy and contribute £600 million to workers' annual wages long-term. Reeves is leading a UK delegation to Saudi Arabia seeking economic growth opportunities with less than a month before the Budget.
Wealthy taxation stance
When questioned about potential higher taxes on the wealthy, Reeves highlighted economic growth as an alternative approach. "There is another way to improve the fiscal position: growing the economy," she stated.
The Chancellor defended the Government's taxation approach for high earners amid concerns about wealthy individuals leaving Britain. "Everybody knows that countries around the world are having to spend more on defence that we need to rebuild our public finances and our public services, and everyone who makes Britain their home should contribute to that," she said.
Reeves emphasised fairness while expressing reluctance to drive people away from the UK. "We don't want to drive anyone out of the UK, but we do want to make sure that we tax people fairly, people who make Britain their home, whichever country they or their parents are originally from," she concluded.
Sources used: "PA Media" Note: This article has been created with Artificial Intelligence (AI).
