Chancellor puts up taxes by £40bn – but says she can’t rule out more hikes

The chancellor cannot rule out more tax rises in the next five years, despite raising the burden to its highest level since comparable records began.

Speaking to Sky News following Labour’s first fiscal event since 2010, Rachel Reeves said it would be “irresponsible” to promise there will not be further tax rises.

However, she suggested that the scale of today’s tax hike – £40bn – was a “once in a parliament” event.

Follow latest: Biggest tax-raising budget since 1993

Speaking to Sky News political editor Beth Rigby, Ms Reeves said: “I’m not going to make a commitment to never change taxes again.

“That would be irresponsible.

“But this is a once-in-a-parliament budget to wipe the slate clean after the mess that the Conservatives have left us.”

The chancellor was asked if she accepted that by raising taxes in such a drastic fashion, she had broken Labour’s manifesto – the document in which a government lays out its policy position before an election.

“I accept that this is a big and a substantial budget,” the chancellor answered.

“It wasn’t the budget that I was expecting to deliver.

“When I became chancellor on 5 July, I didn’t think that any government would be so reckless to have £22bn of unfunded commitments.”

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Chancellor looks to raise £40bn in taxes
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Promise of short-term pain for long-term gain

An analysis provided by the OBR did not confirm Ms Reeves assertion of a £22bn “black hole” – saying it was impossible to calculate exactly how much money the Treasury had not told the watchdog about.

But it did say the March forecast would have had to be redone if they had been told about spending pressures not mentioned to them at the time.

Government documents released today broke down the pressures – including £7.3bn for Health and Social Care, £3,1bn for Education, £7.1bn for the Home office and £4.4bn for Defence.

Speaking to Sky News, Ms Reeves defended pay rises awarded to the public sector since Labour took power.

She said the last government set the remit for the pay review bodies but “hadn’t set an affordability criteria”.

And the chancellor said the huge injection of cash into the NHS – more than £20bn – was needed because otherwise appointments would have to be reduced.

‘No one’s ever compared me to Jeremy Corbyn before’

All of these measures were in the spirit of the “first step in our manifesto”, according to Ms Reeves, which was “to return stability to our economy”.

“That is the most important thing that I had to do as chancellor, and we do have a mandate to bring that stability back to the economy.”

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Asked if her increase in tax and spending was comparable to Jeremy Corbyn’s manifesto promises in 2017 and 2019, the chancellor said: “No one’s ever compared me to Jeremy Corbyn before I stood down from his shadow cabinet because I disagreed with everything that he was doing.

“But if you’re faced with a situation where there’s a £22bn black hole in the public finances, you can either sweep that under the carpet or you can be open and transparent and honest with people about the situation you find yourself in.”