Tax and mend?

Chancellor: I will Unions: Hit the do what is needed rich, not workers

- ASHLEY COWBURN Deputy Political Editor and DAVE BURKE Political Correspondent

RACHEL Reeves says she will do what has to be done for the good of the nation as she prepares to risk alienating the Labour faithful with a painful round of tax rises.

The Chancellor insisted yesterday there will be no return to 14 years of Tory austerity.

However, in a speech setting the scene for the Budget on November 26, she said her job is to do the right thing - even if it is unpopular. Labour's manifesto for last year's election included a promise not to hike income tax, VAT or national insurance.

But facing a £38billion black hole in public finances, Ms Reeves said: "We've got to do the right thing. The problem of the last 14 years is that political expediency always came above the national interest and that is why we are in the mess we are in today."

She added: "As I take my decisions on both tax and spend, I will do what is necessary to protect families from high inflation and interest rates, to protect our public services from a return to austerity and to ensure that the economy we hand down to future generations is secure.

"Each of us must do our bit for the security of our country and the brightness of its future." She added: "The public will respond better to doing the right thing than to just doing the expedient thing."