MNI BRIEF: UK's Reeves Declines To Rule Out Breaking Tax Vows

UK Chancellor Rachel Reeves indicated on Tuesday that her Nov 26 budget will include painful decisions as she sticks to “ironclad” fiscal rules and repeatedly declined to rule to out breaking the governing Labour Party’s campaign promise not to raise key taxes.

“Investment can only be delivered because markets know my commitment to the fiscal rules is ironclad,” said Reeves adding that she would not reclassify defence spending as investment. Asked whether she would break promises not to raise income tax, value-added tax or national insurance contributions, she said policies will be announced on budget day. (See MNI INTERVIEW: BOE Dec Cut Chances Overestimated - Saunders)

Arguing in a speech that previous governments' mismanagement and global factors have pushed borrowing costs up, Reeves said “we will all have to play our part.”

This government is also committed to reforming the welfare state, she said, noting that, “there is nothing progressive about refusing to reform a system that leaves one in eight young people out of work.”