Asked whether higher taxes on the wealthy would feature, the chancellor said \u201cthat will be part of the story\u201d.<\/p>\n
She added: \u201cLast year, when we announced things like the non-doms<\/a>, like the [tax increase for] private equity, like the VAT on private school fees, there was so much bleating that it wasn\u2019t going to raise the money \u2013 that people would leave.<\/p>\n \u201cThe OBR will publish updated numbers on all of those things. And that scaremongering didn\u2019t pay off, because this is a brilliant country and people want to live here.<\/p>\n \u201cAnd I think, when people scaremonger again this year, we should take some of that with a pinch of salt.\u201d<\/p>\n Reeves has previously ruled out imposing a new \u201cwealth tax\u201d<\/a> but campaigners for changes to the system have highlighted other options, including: raising the rate of capital gains tax; levying national insurance on rental income and on partners in law firms and consultancies; and creating higher council tax bands.<\/p>\n There is also speculation she will revive plans to overhaul tax-free Isas to divert cash towards the UK stock market.<\/p>\n Reeves declined to comment on specific measures, though she stressed the package would be aimed at boosting economic growth, as well as raising revenue.<\/p>\n Last year\u2019s budget included a historic \u00a340bn of tax increases and fuelled a furious backlash from business, which bore the brunt of the rise in national insurance contributions.<\/p>\n Asked if spending cuts<\/a> would form part of the budget package, Reeves pointed to potential cost-savings from the use of new technologies but stressed that departmental budgets had been set in this year\u2019s spending review.<\/p>\n She hopes to deliver a decisive budget which will persuade bond markets to lower the UK\u2019s borrowing costs and she repeatedly contrasted her approach, of sticking to Labour\u2019s investment plans in the face of the deteriorating outlook, with the approach of the Conservatives and the Reform party.<\/p>\n \u201cIn the budget next month, there won\u2019t be a return to austerity. We know that we face a changing global environment in terms of the economy at the moment.<\/p>\n \u201cBut last year, I put investment in, to reduce waiting lists, to build housing, to build the energy infrastructure to get people\u2019s bills down sustainably, not through quick fixes, and we\u2019ll stick to that course.\u201d<\/p>\n Asked how she would explain the need for further tax rises, Reeves said she hoped the public would recognise the global economic outlook had darkened.<\/p>\n \u201cI think people can see that this year, in 2025, the world\u2019s been a very, very volatile place,\u201d she said.<\/p>\n \u201cYou turn on your TV every night, it might not always be about the economy, but every night, one of the top two or three stories on the news is going to be around some sort of global tensions that is having repercussions at home. So I think that the British people recognise all of that.\u201d<\/p>\n She added: \u201cI\u2019m being honest and I think the British people respect that and it means I\u2019m not always able to offer the easy answers and the platitudes and the false promises.\u201d<\/p>\n However, she criticised the OBR for the politically awkward timing of its productivity review, coming after Reeves carried out a spending review in June.<\/p>\n \u201cI think that it would have been a lot better if they had adjusted their forecasts the year before the election, or even last summer, to enable the new government to really understand the economic position.\u201d<\/p>\n skip past newsletter promotion<\/a><\/p>\n Sign up to Business Today<\/p>\n Get set for the working day \u2013 we’ll point you to all the business news and analysis you need every morning<\/p>\n Privacy Notice: Newsletters may contain information about charities, online ads, and content funded by outside parties. If you do not have an account, we will create a guest account for you on theguardian.com<\/a> to send you this newsletter. You can complete full registration at any time. For more information about how we use your data see our Privacy Policy<\/a>. We use Google reCaptcha to protect our website and the Google Privacy Policy<\/a> and Terms of Service<\/a> apply.<\/p>\n after newsletter promotion<\/p>\n The OBR reviewed its forecasting model over the summer, focusing on the outlook for productivity, which has been undershooting OBR projections for several years.<\/p>\n Reeves said: \u201cThose forecasts are going to change this year, but it does reinforce what I said all the way through the election campaign, that the number one priority of this government is to grow the economy.\u201d<\/p>\n She pointed to the Tories\u2019 policy of austerity and the impact of Brexit as the key factors behind the UK\u2019s weak productivity record, which stretches back to the global financial crisis of 2008.<\/p>\n Experts expect the independent forecaster to say the public finances look \u00a310bn-\u00a320bn weaker in five years\u2019 time than it believed at the spring statement in March.<\/p>\n That downgrade comes in addition to the \u00a310bn cost of Labour\u2019s U-turns on the winter fuel allowance, and botched reforms to disability benefits.<\/p>\n As well as closing that gap, Reeves is expected to use the budget to build up greater headroom against her fiscal rules, to cushion the UK against volatility in government bond markets, which has a knock-on effect on the Treasury\u2019s borrowing costs.<\/p>\n When the \u00a310bn margin for error she allowed herself in last year\u2019s budget looked set to be wiped out at the time of the spring statement, she chose to respond with welfare cuts \u2013 which were subsequently rejected by Labour MPs. She believes a larger buffer will contain the impact of market jitters on policymaking.<\/p>\n Reeves said that by getting a grip on the finances, she hopes to convince investors to close the gap that emerged between the UK\u2019s borrowing costs and those of other large economies at the time of Liz Truss\u2019s disastrous mini-budget in 2022.<\/p>\n \u201cWhen Liz Truss and Kwazi Kwarteng did their mini-budget three years ago, our bond yields decoupled from other G7 economies and they are still at an elevated level compared to other countries. I want to bring us back in line.\u201d<\/p>\n She said that the UK now spends more than \u00a3100bn a year on interest alone \u2013 with much of it going to overseas investors.<\/p>\n \u201cIf you say to people: \u2018What would you like to spend more on?\u2019 \u2013 they\u2019re going to say schools, hospitals, police on our streets, parks and local facilities.<\/p>\n \u201cNo one\u2019s going to say: \u2018We\u2019re keen that we spend more on servicing our debt to US hedge funds.\u2019<\/p>\n \u201cAnd yet that is the item of spending that went up the most under the previous government, and there is absolutely nothing progressive about it.<\/p>\n \u201cI\u2019m providing that confidence to people who buy government bonds that I\u2019ve got a grip on the public finances. And if we can continue to do that, I am convinced we can bring down those borrowing costs.\u201d<\/p>\n![\"Why](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2025\/10\/1760558469_120_1920.jpg\")
Why it is so hard to tax the super-rich \u2013 video<\/p>\n