Introduction to the Budget
A finance minister refused to exclude tax increases in the budget in autumn, since global economic instability could mean that the government will not have enough money to finance its expenditure plans.
Defense of Economic Handling
The minister defended how the economy was handled, but would not say whether taxation could be necessary. After being repeatedly asked whether she excludes tax increases, the minister said: "I do not decide and do not exclude it." The minister also stated that the government has £9 billion fiscal headroom, which is significantly more than the previous government had at the end of their term.
Growing Economy and Budget
The minister added that the government has a growing economy and that the budget last autumn was a unique budget in which they had to do some very difficult things. The minister also mentioned that they will not have any more budgets in the future like the one last autumn.
Opposition Reaction
The Shadow Chancellor said that the minister’s interview revealed that tax increases are coming. The Chancellor avoided direct questions about potential tax increases, saying that they will show their plans in the autumn budget.
Fiscal Rules
The Chancellor has imposed fiscal rules that restrict the government’s borrowing to ensure economic stability and reduce public debt. These rules mean that the amount of money the government can spend on public services is limited to what they take in tax revenue.
Limited Space for Maneuvers
An expert from the Institute for Fiscal Studies said that the Chancellor has left very little space for maneuvers. If economic forecasts are negative, the government may have to increase taxes to meet their fiscal rules. The expert noted that the government has had some negative messages in recent months, which could lead to tax increases.
