Cuts on menu after Reeves holds firm on taxes pledge

Britain is facing cuts after Rachel Reeves doubled down on her manifesto pledge not to raise taxes to fund Labour's spending plans.

- DAVID MADDOX

In a speech in Manchester yesterday, the chancellor insisted Labour’s spending plans – set to be outlined next week – were “fully costed and fully funded” and that she would not need to raise income tax, VAT or employee national insurance contributions.

But a major think tank has joined critics from within government to warn that the chancellor would have no choice but to make cuts to other public services.

The Resolution Foundation said the government has increased departmental spending by almost £400bn since it came to power but pressures to increase health and defence spending will make it “hard to avoid cuts” to other public services.

Reacting to Reeves’s speech, a senior Labour source added: “I suspect that means a lot of cuts.”

The criticism comes days after the government committed to a major boost in defence funding, having also pledged to reinstate the winter fuel allowance to millions of pensioners this winter. Sir Keir Starmer is also under pressure to abolish the two-child benefit cap.

Ruth Curtice, chief executive of the Resolution Foundation, said: “By the end of this parliament, the level of departmental spending will be back to pre-austerity levels, but growing pressure to spend all this increase on health and defence could lead to continued public service cuts elsewhere.

“Whether or not the government can chart a course through health that leans on capital but restrains growth in day-to-day spending will be crucial to the outcomes for everyone else.”

Ben Caswell, senior economist at the National Institute of Economic and Social Research, told The Independent that cuts had to be considered without tax rises.