Budget will raise taxes on wealthy to fix public finances, says Reeves

Exclusive Chancellor dismisses 'bleating' over revenue-raising policies

- Heather Stewart

Rachel Reeves said last night that higher taxes on the UK's wealthy would form part of next month's budget as she shrugged off the "scaremongering" and "bleating" of her critics and stressed her determination to repair the public finances.

Speaking in Washington, where she is attending the annual meetings of the International Monetary Fund (IMF), the chancellor told the Guardian there "won't be a return to austerity" and hinted at tax increases for the most well-off.

Reeves is expected to announce a package of tax increases on 26 November in response to a downgrade in growth forecasts by the independent Office for Budget Responsibility (OBR).

Asked whether higher taxes on the wealthy would feature, the chancellor said it would be "part of the story", adding: "Last year, when we announced things like the nondoms, like the [tax increase for] private equity, like the VAT on private school fees, there was so much bleating that it wasn't going to raise the money-that people would leave.

"The OBR will publish updated numbers on all of those things. And that scaremongering didn't pay off, because this is a brilliant country and people want to live here. And I think, when people scaremonger again this year, we should take some of that with a pinch of salt." Reeves has previously ruled out imposing a "wealth tax" but campaigners for changes to the system have highlighted other options, 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.