\n<\/p>\n
British Chancellor of the Exchequer Rachel Reeves speaks to media prior to her speech on day two of the Labour Party conference at ACC Liverpool on September 29, 2025 in Liverpool, England. <\/p>\n
Ian Forsyth | Getty Images News | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n
U.K. Chancellor Rachel Reeves gave little away Monday about where the axe could fall in the forthcoming budget, as she looks to fill a hole in Britain\u2019s public finances.<\/p>\n
Addressing the Labour Party\u2019s annual conference in Liverpool on Monday, Finance Minister Reeves said she would champion Britain\u2019s economic \u201crenewal\u201d ahead of the Treasury\u2019s Nov. 26 Autumn Budget, with a focus on \u201cthe abolition of long-term youth unemployment.\u201d<\/p>\n
Anyone hoping for clues about plans for tax hikes or spending cuts was left disappointed, however, as the finance minister instead announced plans to get thousands of young people on benefits into paid work as part of a \u201cYouth Guarantee\u201d scheme.<\/p>\n
\u201cEvery young person will be guaranteed either a place in a college, for those who want to continue their studies or an apprenticeship, to help them learn a trade vital to our plans to rebuild the country, or one-to-one support to find a job,\u201d she told conference delegates.<\/p>\n
\u201cBut more than that our guarantee will ensure that any young person out of work for 18 months will be given a paid work placement. Real work, practical experience, and new skills,\u201d she said in comments released by the government in advance of her speech.<\/p>\n
While Reeves did not\u00a0specifically reference\u00a0the budget, she alluded to tough choices\u00a0that lie\u00a0ahead, telling the audience:<\/p>\n
\u201cWe will face further tests, with choices to come made all the harder by harsh global headwinds and long-term damage to the economy, which is becoming ever clearer.\u201d<\/p>\n<\/div>\n
While sounding a positive note for young people, Reeves\u2019 speech did little to dispel wider public concerns that taxes will need to rise in order to fill a growing fiscal hole<\/a>.<\/p>\n The issue has been exacerbated by spending commitments made by Reeves in the last year, U-turns on welfare cuts and the chancellor\u2019s determination to stick to her own self-imposed rules on balancing the books, lowering U.K. debt and only borrowing to invest.<\/p>\n Estimates vary, but economists suggest the chancellor could now need to find as much as an extra \u00a350 billion<\/a> ($67.16 billion) to fill the gap in the U.K.\u2019s public finances amid substantial spending on welfare and public services, lower tax receipts and growth, and higher borrowing costs.<\/p>\n In her last Autumn Budget, Reeves carried out a $40 billion tax raid that largely hit British businesses and employers, raising the minimum wage and national insurance contributions they had to pay. She promised she would not hit businesses further, while the Labour Party had committed to not raising taxes on working people before coming to power<\/a> in a landslide victory in July 2024.<\/p>\n Now, faced with her own strict rules on spending, borrowing and balancing the budget, the chancellor is highly likely to have to break promises as she seeks to to fill the fiscal hole.<\/p>\n Balancing the books is an unviable task for Reeves, who made headlines earlier this year after she cried in parliament. Questions over whether she might be sacked<\/a> rattled markets amid accusations that she was mismanaging Europe\u2019s second-largest economy, behind Germany.<\/p>\n \u201cThe Chancellor is boxed in by her own numbers and by political reality,\u201d Nigel Green, chief executive of financial advisory firm deVere Group, said in emailed comments Monday. \u201cMarkets will demand discipline, but her party will demand action. The path of least resistance is higher taxation.\u201d<\/p>\n \u201cInvestors should take seriously the risk of a broad-based tax grab,\u201d he said, adding: \u201cWhen gilt yields are this high and the deficit this wide, the Treasury will look for revenue wherever it can find it.\u201d<\/p>\n<\/div>\n Prime Minister Keir Starmer and Finance Minister Rachel Reeves to his right, looking visibly upset, in the House of Commons on Wednesday.<\/p>\n Image sourced under the Open Parliament Licence v3.0<\/p>\n<\/div>\n<\/div>\n<\/div>\n Indeed both Reeves and U.K. Prime Minister Keir Starmer \u2014 who has backed her repeatedly \u2014 have signalled that tax rises could be on the immediate horizon.<\/p>\n Speaking to the BBC earlier Monday, Reeves refused to guarantee that she will not extend the freeze on income tax thresholds \u2014 the rates at which workers start paying higher taxes.<\/p>\n \u201cI\u2019m not going to be able to do that,\u201d Reeves told the broadcaster, <\/a>saying \u201cthe world has changed\u201d amid trade tariffs and ongoing conflict in Ukraine and the Middle East.<\/p>\n She added that Labour\u2019s pre-election commitment to not raise VAT, a tax added to most products and services, still stands, echoing Starmer\u2019s stated position when questioned on the matter on Sunday.<\/a><\/p>\n<\/div>\n<\/div>\n\n
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