Reeves reaffirms no tax rise for workers but eyes VAT changes

29 September 2025 , 09:03

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Reeves reaffirms no tax rise for workers but eyes VAT changes

On Monday, the Chancellor insisted she will uphold her pledge not to raise taxes on “working people” in her upcoming Budget, but left the possibility open for changing VAT rules to enhance Treasury funds.

Rachel Reeves faces the challenge of addressing a £40 billion shortfall in the nation’s finances when she presents her economic plans in November.

Before her speech at the Labour Party conference in Liverpool on Monday, Ms. Reeves promised to adhere to her fiscal rules and her commitment not to increase taxes on working people, despite the rise in borrowing costs.

“Borrowing costs for all economies, particularly in the long term, have risen, often significantly, and we’re not immune to that in Britain as an open trading economy,” she told Sky News.

"But those manifesto commitments we made 15 months ago remain in place, and the reason we made those commitments was because working people had been the ones to bear the brunt of the economic mismanagement of the previous government.

"I want to make working people better off, which is why we made those commitments and why we stand by them as stated in the manifesto."

However, Ms. Reeves avoided addressing rumours that the government is considering changes to value-added tax (VAT).

Sophia Martinez