Tax rises in the Budget are ‘inevitable’, says think tank

Tax rises are “inevitable”, a leading think tank has warned hours before Rachel Reeves sets out her Budget priorities.

- MILLIE COOKE POLITICAL CORRESPONDENT

The chancellor will use a speech today to pave the way for sweeping tax rises expected to be announced at the end of the month, promising to make "important choices that will shape our economy for years to come".

In a pre-Budget address, she will set out her three priorities for the fiscal event - cutting hospital waiting lists, the national debt and the cost of living.

The Resolution Foundation has said it believes there is a way to implement the “inevitable” tax rises that “boosts confidence in the economy and the public finances, while also reducing child poverty and the cost of living”.

Ms Reeves is expected to promise a Budget “led by this government's values, of fairness and opportunity and focused squarely on the priorities of the British people”. Acknowledging growing speculation over possible tax rises, she will argue that it is important the public understands the circumstances facing the country.

In its pre-Budget review, the foundation, whose stated aim is to improve living standards of the less well off, said the chancellor should aim to double her fiscal headroom in her statement to the Commons on 26 November. This, it says, would result in the buffer against unexpected changes in economic headwinds increasing to £20bn, but it also acknowledged that an increase of £15bn was “perhaps” more realistic.