Budget 2024: Chancellor Rachel Reeves defends £40bn tax rises – ‘everything has to be paid for’
Rachel Reeves has defended raising taxes by the highest amount since 1993 as she said “everything has to be paid for”.
The chancellor announced £40bn worth of tax rises in Wednesday’s budget, with the lion’s share coming from a £25bn increase in employers’ National Insurance contributions.
She told Sky News’ Breakfast With Kay Burley that, unlike the previous Conservative government, she has included everything ministers will spend in their forecast, including £11.8bn compensation for victims of the infected blood scandal and £1.8bn for victims of the Post Office accounting scandal.
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Ms Reeves insisted the tax rises would “fix the foundations and wipe the slate clean” and that this would be a one-off budget.
She added: “As a result of what we’ve done, we’re not going to have to come back and ever do a budget like this again, because we’ve brought everything out into the open.”
The chancellor also admitted growth “is largely unchanged” in the next five years, as revealed by the Office for Budget Responsibility’s (OBR) report on the budget.
But she said that is because she is looking at the economy in the long-term.
She said: “For the first time, the OBR are now looking at economic growth over a longer time frame.
“And that’s really important because often politicians make short-term decisions rather than things that are in the long term interests of the country.”
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‘Raising taxes was not an easy decision’
Ms Reeves said she had to make the tax rises she did, despite promising not to raise taxes beyond Labour’s manifesto, because of “the circumstances that I inherited” from the Conservatives as she repeated they left a £22bn black hole.
“I could have swept that under the carpet and pretended it didn’t exist, or try and raise a bit of money this year and a bit more next year,” she said.
“I didn’t want to do that.
“I wanted to be open and honest, to wipe the slate clean, to put our public finances on a stable trajectory, to make sure that our NHS is properly funded so we can bring down those huge waiting lists.”
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UK’s economic growth forecast
Ms Reeves’ predecessor, the Conservative Party’s Jeremy Hunt, said Wednesday was a “bad day for trust in British politics” and said it will mean “lower pay, lower living standards, higher inflation, higher mortgages” for ordinary families.
He told Sky News: “Because 30 times this year before the election, the chancellor said she had no plans to increase tax outside of what was explicitly written in the Labour manifesto.
“And we had the biggest tax raising budget in British history.”
The shadow chancellor said a Conservative budget would have taken “the harder path” by cutting the number of people on benefits to 2019 levels to fund public services, which he said would release £34bn a year.
He added he does not think “anyone actually believes this £22bn number… but she didn’t increase taxes by £22bn, she increased them by £40bn”.
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“This was not about her legacy. This was a choice,” he added.
“This was the budget that she wanted to do all along. And it’s a legitimate choice. It’s one I disagree with. But if she’d wanted to do that, she should have told us before the election we could have had the debate.”
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Kemi Badenoch has called for a national inquiry into the grooming scandal that took place across UK towns and cities, arguing one was “long overdue”.
The Tory leader said 2025 “must be the year that victims get justice” after it emerged that Jess Phillips, the safeguarding minister, had rejected calls from Oldham council for a public inquiry into child exploitation in the town.
In a post on X, the Tory leader wrote: “The time is long overdue for a full national inquiry into the rape gangs scandal.
“Trials have taken place all over the country in recent years but no one in authority has joined the dots. 2025 must be the year that the victims start to get justice.”
Ms Badenoch was joined in her calls by shadow safeguarding minister Alicia Kearns, who has written to Ms Phillips asking her to reverse the government’s decision regarding Oldham.
“We have asked for planned Conservative measures to be enacted, to reverse the Oldham refusal, and for a statutory inquiry into grooming and rape gangs,” she wrote.
Girls as young as 11 were groomed and raped across a number of towns in England – including Oldham, Rochdale, Rotherham and Telford – over a decade ago in a national scandal that was exposed in 2013.
The following year a report by Prof Alexis Jay revealed the scale of exploitation in Rotherham between 1997 and 2013 – where around 1,400 girls were abused – and the failure of police and social services to intervene.
It was followed by the statutory Independent Inquiry into Child Sexual Abuse (IICSA), also chaired by Prof Jay, who found in her final report published in 2022 that children were still being sexually exploited by networks in all parts of England and Wales in the “most degrading and destructive ways”.
The final report recommended that institutions that work with children should be required by law to report suspicions of child sexual abuse.
In a letter to Oldham Council dated October last year, Ms Phillips, the Labour MP for Birmingham Yardley, said that while she recognised the “strength of feeling” over the matter, she believed it was for “Oldham Council alone to decide to commission an inquiry into child sexual exploitation locally, rather than for the government to intervene”.
She added: “I welcome the council’s resolution to do so, as set out in your letter, and to continue its important work with victims and survivors.
“Should the council choose to proceed, I would look forward to the inquiry’s findings and ensuring that any lessons that can be learnt to improve the frontline response are adopted at a local and, where applicable, at a national level.”
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Children ‘still at risk’ of abuse in Rochdale
Ms Phillips has been criticised for her response by Conservative politicians, including former home secretary Suella Braverman, who accused the minister of “letting down victims”.
However, Ms Badenoch faced criticism on social media by Sammy Woodhouse, a survivor of sexual abuse in Rotherham, who said: “I’ve met with your party for 12 years about this when you were in power. I asked for an inquiry into every town and city, none of you cared. Now you need the vote you want to speak on it?”
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And Reform UK leader Nigel Farage said: “Talk is cheap. The Conservatives had 14 years in government to launch an inquiry.
“The establishment has failed the victims of grooming gangs on every level.”
An Oldham Council spokesman said: “Survivors sit at the heart of our work to end child sexual exploitation.
“Whatever happens in terms of future inquiries, we have promised them that their wishes will be paramount, and we will not renege on that pledge.”
A Labour spokesperson said: “Child sexual abuse and exploitation are the most horrendous crimes and the Home Office supports police investigations and independent inquiries to get truth and justice for victims.
“We have supported both the national overarching inquiry into child abuse which reported in 2022, and local independent inquiries and reviews including in Telford, Rotherham and Greater Manchester.
“This government is working urgently to strengthen the law so that these crimes are properly reported and investigated.”
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