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The government is still reviewing plans to tighten reporting requirements for small and micro companies, with ministers yet to decide whether to press ahead with rules that would require them to publish profit-and-loss accounts for the first time.
In an interview with The Times, Blair McDougall, the new small business minister, said that “all options are on the table” as officials weigh up the balance between tackling fraud and protecting small firms from unnecessary administrative burdens.
“There are obviously different arguments in terms of the impact on businesses of their exposure, particularly for SMEs, versus people who are worried about financial crime and everything else,” McDougall said. “We’re balancing that at the moment and discussing it.”
Under plans announced by Companies House in June, firms classified as “small” or “micro” would lose the right to file abbreviated accounts from April 2027. Instead, they would have to submit full profit-and-loss statements, revealing revenues and profits.
The move formed part of the Economic Crime and Corporate Transparency Act, designed to reduce fraud and improve the accuracy of information filed at Companies House. However, within days of the announcement, the Department for Business and Trade signalled a pause in the rollout amid concerns from business groups that the new rules would increase red tape and risk exposing commercially sensitive data.
If implemented, the reforms would affect companies with turnover below £10.2 million, balance sheets under £5.1 million, and fewer than 50 employees. They would also require all firms to file accounts digitally using commercial software, ending the use of paper and web-based submissions.
The proposals were first consulted on in 2019 and made law in 2023 under the previous Conservative government. Business groups have broadly supported greater transparency but warned that the changes could deter entrepreneurship by exposing small firms’ financial details to competitors.
McDougall, who became an MP in 2024 and took on his first ministerial role in September, said the government’s focus was on building business confidence and long-term growth rather than rushing through reforms.
He added that success would be judged by how well the government delivers on its Small Business Plan and industrial strategy, both launched earlier this year. “We’ve got a terrible history in government of publishing these PDFs that then gather dust,” he said.
McDougall spoke during International Trade Week at The Great British Pitch, an event organised by Small Business Britain that brought together entrepreneurs and international buyers. He said such initiatives were central to boosting the profile of British SMEs and driving export-led growth.
The final decision on the Companies House reforms is expected early next year, with officials indicating that ministers are still assessing the regulatory impact on smaller businesses before confirming the 2027 timetable.
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Government still weighing changes to small company filing rules, says business minister

Chancellor Rachel Reeves has signalled that her 26 November Budget will ask more Britons to shoulder the burden of repairing the nation’s public finances — even if that means breaking Labour’s manifesto pledge not to raise income tax.
In a speech this week, Reeves warned that “hard choices” were unavoidable if Britain was to protect the NHS, reduce national debt and keep inflation under control. Her language marked a shift from earlier assurances that only those with the “broadest shoulders” would face higher taxes.
“If we are to build the future of Britain together, we will all have to contribute,” she said. “When that requires hard choices, we will act guided by the interests of working people.”
While the Chancellor maintained that fairness would underpin her fiscal plans, her remarks were widely interpreted in Westminster as preparing voters for a broader tax rise that could affect millions of middle-income workers.
At the heart of the political tension lies the question of how Labour defines “working people” — a term that may exclude much of the upper-middle-income bracket. Treasury insiders suggest the government considers those earning up to £45,000–£46,000 a year as “working people”.
That would leave roughly one-third of UK earners outside the protected group, potentially exposing professionals such as paramedics, teachers, software developers, and vets to higher income tax or national insurance contributions.
Data from the Office for National Statistics (ONS) shows that around 40% of male employees and 20% of female employees earn above £45,000. In London, where the median full-time salary stands at nearly £50,000, the proportion is significantly higher — meaning the capital’s workforce could face the steepest hit.
Ironically, Labour’s own inflation-busting public sector pay awards could see the Chancellor give with one hand and take with the other. NHS pay scales show that senior paramedics, speech and language therapists, and school nurses now earn above the proposed threshold.
Similarly, the National Education Union estimates that nearly all school leaders and senior teachers fall within the bracket likely to face higher tax. Years of frozen income tax thresholds — known as fiscal drag — have already pushed many of these workers into higher bands.
Britain’s finances have become increasingly reliant on a small pool of top-rate taxpayers. According to HMRC projections, 1.2 million people earning above £125,140 — just 3% of all income-tax payers — contribute around 40% of total income tax receipts.
Income tax now raises more than £300 billion annually, making it the government’s single largest revenue stream. Yet, as tax policy experts point out, Britain’s average worker still pays less tax on earnings than counterparts in most major European economies.
“The UK system has become top-heavy,” said Chris Sanger, head of tax policy at EY. “If you increase rates for those with the highest incomes, you risk losing mobility and, ultimately, revenue. In a post-pandemic world where remote work is common, the wealthy can relocate more easily than ever.”
The political risk for Labour is that a tax rise on higher earners could alienate the very middle-class voters who helped deliver its 2024 election victory. YouGov polling shows that households earning over £50,000 were disproportionately likely to vote Labour, while Reform’s support was strongest among lower-income groups and Conservative voters skewed older and retired.
If Reeves presses ahead, she faces a delicate balancing act: funding the public services Labour has promised to revive, while avoiding a backlash from the professionals and entrepreneurs who underpin Britain’s tax base.
As one City economist put it: “Reeves is walking a fiscal tightrope — between fairness and flight risk. The more she taxes those who can move, the less they’ll stay to pay.”
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Labour risks breaking tax pledge as Rachel Reeves targets higher earners in autumn Budget

The Bank of England has voted narrowly to hold interest rates at 4%, pausing further cuts amid stubborn inflation and growing uncertainty ahead of Chancellor Rachel Reeves’ pivotal Budget later this month.
In a closely split decision, the Monetary Policy Committee (MPC) voted 5–4 to maintain the current rate, with Governor Andrew Bailey casting the deciding vote. Bailey said he would “prefer to wait” before supporting any further loosening of monetary policy, citing ongoing concerns about inflation expectations among households and elevated wage growth.
The Bank expects inflation to remain above its 2% target until the second quarter of 2027, forecasting a gradual decline from its current 3.8% level. Officials said consumer price inflation had “peaked” but warned that persistent price pressures — particularly in services and food — continued to pose risks.
In its latest economic outlook, the Bank maintained its growth forecast of 1.4% for both 2025 and 2026, revising up the current year slightly but lowering next year’s estimate amid weakening demand and a slowing labour market.
Some members of the MPC highlighted evidence of a cooling jobs market and falling vacancies, which could reduce inflationary pressures. Others, however, warned that wage growth of 4.9% in the three months to August was still too high to justify immediate cuts.
Bailey said that while inflation risks were “less pressing” than in August, the case for easing policy had not yet been proven.
“Upside risks to inflation have become less pressing since August, and I see further policy easing if disinflation becomes more clearly established in the period ahead,” he said. “Rather than cutting Bank Rate now, I would prefer to wait and see if the durability in disinflation is confirmed in upcoming economic developments this year.”
The Bank’s statement dropped the word “careful” from its policy guidance, describing instead a “gradual path downwards” for rates — a subtle but significant signal that a series of cuts could follow in 2026 if inflation continues to ease.
The decision comes as markets await Reeves’ 26 November Budget, expected to include new tax rises to fund public spending and reduce borrowing. The Chancellor has hinted that “all must contribute” to restoring fiscal health — a departure from earlier pledges that only those with “the broadest shoulders” would face higher taxes.
Economists say any income tax increases announced later this month could be disinflationary, reducing consumer spending power and potentially allowing the Bank to cut rates sooner in 2026. However, uncertainty over fiscal policy — and the size of a reported £30 billion funding gap — is prompting the MPC to keep its options open.
The Bank also noted that last year’s £25 billion increase in employers’ national insurance contributions (NICs) had fed through to higher supermarket prices, with food inflation expected to reach 5.3% by year-end. Officials said the impact of those changes was now largely absorbed by consumers.
Economists were divided on the Bank’s decision. William Ellis, senior economist at the IPPR, said the MPC had missed an opportunity to support growth.
“Monetary policy remains tight, and the Bank should have gone further today by cutting rates to support the economy,” he said. “With inflation flat, sluggish growth, and a cooling labour market, the case for easing is clear.”
Daniel Austin, CEO and co-founder of ASK Partners, said the decision reflected a cautious stance amid global volatility and fiscal uncertainty.
“With the Autumn Statement approaching and policy in flux, it’s little surprise the MPC has held rates at 4%,” he said. “High fixed-rate mortgages mean meaningful relief for homeowners remains distant. In property, the decision reinforces a ‘wait and see’ mood — with buyers pausing and developers holding back.”
Austin added that while easing planning rules and offering temporary levy relief could help restart stalled housing projects, “a clear, sustained fall in inflation remains key to unlocking broader investment”.
Despite signs of progress on inflation, the Bank’s latest move underscores a fragile recovery. A combination of high borrowing costs, weak productivity growth, and looming fiscal tightening has kept confidence muted across households and businesses alike.
With both the Bank of England and the Treasury facing competing pressures — to tame inflation without choking growth — the next few months could prove decisive in shaping Britain’s economic trajectory into 2026.
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Bank of England holds interest rates at 4% as Rachel Reeves’ Budget looms

The National Enterprise Network (NEN) has urged Chancellor Rachel Reeves to use this month’s Autumn Statement to deliver a new wave of support for Britain’s micro and small businesses (MSBs) — which it says are “the foundation of the UK economy” but increasingly constrained by rising costs and patchy access to finance.
Representing a nationwide network of local enterprise agencies and business support organisations that together cover 98% of the UK, the NEN is pressing the Treasury to take “decisive action” across four key policy areas: growth and investment, access to finance, skills and support infrastructure, and the net zero transition.
The submission comes as 5.45 million UK firms — accounting for over 99% of all private sector businesses — face mounting pressures from inflation, short-term funding cycles and the cost of digital and environmental adaptation.
“Micro and small businesses are the engine of the UK economy,” said Alex Till, Chair of the National Enterprise Network. “But their success depends on the ecosystem that supports them — the enterprise agencies, business hubs, and community workspaces that help individuals take their first steps into entrepreneurship. Without urgent action, we risk losing a generation of early-stage entrepreneurs.”
Four key policy priorities
Enabling small businesses to grow and thrive
NEN is calling for a Small Business Growth Allowance to encourage firms to reinvest profits in digital adoption, upskilling and capital investment, alongside expanded Local Enterprise Grants for rural and underserved areas.
It also proposes a Business Resilience Fund to help firms manage energy and climate-related pressures, and a simplification of access to existing government loans, grants and training schemes. The network is urging the Treasury to extend Business Rates Relief for the smallest firms in high-cost areas.
A particular focus is on the future of shared and managed workspaces, which NEN describes as “the first rung of the enterprise ladder”. Many of these community hubs — often run by not-for-profit organisations — are under threat from rising business rates and operational costs.
The group wants the Government to review the business rates treatment of co-working and managed spaces and to introduce dedicated relief for community and not-for-profit workspace operators.
Improving access to finance
The NEN is pressing for reforms to the Enterprise Finance Guarantee (EFG) to make smaller loans (under £50,000) more accessible, and the introduction of a Micro-Investor Tax Relief Scheme to encourage local private investment.
It also calls for greater awareness of Community Development Finance Institutions (CDFIs) and the creation of a Digital Finance Support Programme to help small firms modernise payments, invoicing, and cashflow systems.
Strengthening skills and support networks
The submission recommends funding Enterprise Skills Bootcamps — five-week intensive training programmes delivered through NEN member agencies — and expanding access to modular apprenticeships and digital skills vouchers in areas such as e-commerce, AI and online marketing.
To ensure long-term stability, the network wants a Support Infrastructure Stability Fund providing multi-year contracts for local enterprise agencies and business hubs, and a Capacity-Building Grant Fund to help them upgrade digital systems and impact measurement tools.
Accelerating the net zero transition
NEN’s final proposals focus on helping small firms manage the costs of decarbonisation. It calls for a Small Business Energy Transition Fund and temporary energy cost relief for microbusinesses in energy-intensive sectors.
It also wants targeted funding for local enterprise agencies to deliver Net Zero Readiness Advisory Services, helping firms comply with environmental standards while remaining competitive.
“Without action — particularly around business rates reform for shared workspaces and sustainable funding for enterprise support infrastructure — the UK risks losing the networks that sustain entrepreneurship at a local level,” Till added.
Central to the NEN’s message is the need for government to support the supporters — the local enterprise agencies and community business hubs that provide front-line help to Britain’s entrepreneurs.
By adopting its recommendations, the organisation says the Treasury can strengthen both the small business base and the infrastructure that underpins it, helping to secure a “more inclusive, innovative and resilient economic future” for the UK.
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National Enterprise Network urges Chancellor to back small business growth in Autumn Statement

Phoebe Gormley, founder of Savile Row’s first women’s tailoring house, launches Fit Collective — an AI-powered platform aiming to cut billions in clothing returns.
The entrepreneur behind Gormley & Gamble, the first women’s tailoring business on London’s Savile Row, has raised £3 million for her new venture Fit Collective, a technology start-up using artificial intelligence to fix one of fashion’s most expensive challenges — inconsistent sizing.
Phoebe Gormley, 31, said inaccurate sizing was costing the global fashion industry an estimated $230 billion a year in returns, with premium womenswear return rates reaching 50 per cent in the UK alone. “Consumers are frustrated and retailers are losing a hell of a lot of money,” she said.
Fit Collective’s platform analyses how garments fit across different body types, drawing on sales, returns and fabric behaviour data to give design and production teams “clear, actionable insight” on improving fit and reducing waste.
The company, based in Holborn, employs ten people and plans to double its workforce within a year, focusing on hiring engineers. Founded in June 2023, Fit Collective already manages more than £1 billion in retailer revenue and counts Rixo and Boden among its clients.
The £3 million seed funding round, which values the company at £11 million, was backed by Albion Capital, SuperSeed, and True Capital, alongside angel investors from Net-a-Porter and Farfetch.
Gormley’s tailoring background gave her both the expertise and data to tackle fashion’s sizing crisis. After dropping out of university in 2015 and using her tuition fees to start Gormley & Gamble, she built a business dressing “princesses, CEOs, schoolgirls and everyone in between.” Across clients, she noticed one universal complaint: poor sizing.
Her experience produced what she calls “the only data set in the world that has body measurements and garments” — a foundation that informs Fit Collective’s technology.
Gormley said most existing online “find my size” tools are flawed because they rely on incomplete user data and ignore how each brand defines sizing. “They don’t know if a garment is designed to run three sizes too big or two sizes too small,” she said. “Only around 3 per cent of shoppers even use them.”
To demonstrate the problem, she bought 20 pairs of women’s jeans, all labelled size 28. “The biggest one was a 74cm waist and the smallest one was a 66cm waist — that’s a 12cm gap, or about three and a half sizes difference,” she said.
By helping brands standardise sizing and reduce returns, Fit Collective hopes to make fashion not only more profitable but more sustainable — cutting down on the carbon and financial cost of ill-fitting clothes sent back each year.
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Savile Row entrepreneur Phoebe Gormley raises £3m for AI fashion sizing start-up Fit Collective

Carmakers say Rachel Reeves’ plan to tax employee vehicle ownership schemes will backfire — cutting sales, jobs and Treasury revenue.
Britain’s leading carmakers have warned that a Treasury plan to impose company car tax on employee car ownership schemes (Ecos) could cost the Exchequer £500 million in lost revenue and threaten thousands of manufacturing jobs.
The Society of Motor Manufacturers and Traders (SMMT) said the proposed tax changes, due to take effect in October 2026, would “seriously impact” new car sales, penalise workers, and undermine investment in the UK’s transition to green transport.
The move, announced by Chancellor Rachel Reeves last autumn, would see Ecos vehicles taxed as benefits in kind — ending their exemption and aligning them with salary sacrifice schemes already subject to company car tax.
Under the current system, Ecos allow employees to buy new cars from their employer via a credit agreement, saving employers and workers millions in National Insurance contributions. The schemes are especially popular among car company staff, who can drive new models at discounted prices for around six months before the vehicles are sold on as “nearly new” stock.
According to SMMT analysis, around 100,000 cars are currently provided to workers through Ecos each year — roughly 5 per cent of the UK’s new car market. The group predicts that figure would collapse to just 20,000 if the tax goes ahead, leading to a £1 billion revenue loss for carmakers, 5,000 jobs at risk, and a £500 million fall in VAT and vehicle excise duty receipts.
The Treasury estimates the change would raise £275 million in its first year, falling to £175 million by 2030 as the market adjusts. However, industry leaders argue the real-world impact would be the opposite.
Mike Hawes, SMMT chief executive, said: “The Government has supported the automotive sector through EV incentives and trade deals, helping to drive growth and decarbonisation. But scrapping Ecos would undermine that progress — penalising workers, reducing Exchequer income and putting green investment at risk. At a time when the Budget should fuel growth, this measure will do the exact opposite. It’s time for a rethink.”
Robert Forrester, chief executive of Vertu Motors, previously warned that the policy is “likely to reduce income to the Exchequer rather than increase it.”
An industry insider described Ecos as a “win-win” for workers and manufacturers: “It’s a good scheme for staff — they get to drive the newest cars at a discount — but the system also supports sales and the used car market.”
In its policy paper, the Treasury said: “Private use of a company car is a valuable benefit, and it is right that the appropriate tax is paid on it. This measure will ensure fairness with other taxpayers, reduce distortions in the tax system, and reinforce the emissions-based company car tax regime that incentivises zero-emission vehicles.”
The row comes as SMMT figures show the UK new car market grew 0.5 per cent in October, with 144,948 cars sold, including 36,830 electric vehicles (25.4 per cent of sales) — up from 20.7 per cent a year ago.
Petrol models remained dominant, accounting for 44.4 per cent of sales, down from 50.5 per cent last year. The figures follow the launch of the government’s new electric vehicle grant, offering up to £3,750 off the cost of new EVs.
The Treasury declined to comment further.
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Carmakers warn company car tax shake-up will cost Treasury £500m

Sir Charlie Mayfield says ill-health is driving millions out of work, costing employers and the economy billions — but the problem is “not inevitable.”
Britain is at risk of an “economic inactivity crisis” as the number of sick and disabled people out of work continues to rise, according to a government-commissioned review led by Sir Charlie Mayfield, the former John Lewis chairman.
The report warns that 800,000 more people are now out of work due to health conditions than in 2019, costing employers £85 billion a year in lost productivity, sick pay and staff turnover. Without intervention, a further 600,000 workers could leave the labour market by 2030.
“This is not inevitable,” Sir Charlie said, as he launched a new taskforce aimed at helping people return to work and tackling what he described as a “vicious cycle” of poor health and economic inactivity.
The report, commissioned by the Department for Work and Pensions (DWP) but produced independently, found that one in five working-age people is now out of work and not seeking employment — a major reversal after decades of improving participation.
Sir Charlie said sickness is costing the UK far more than just business losses.
“Work is generally good for health, and health is good for work,” he said. “For employers, sickness and staff turnover bring disruption and lost experience. For the country, it means weaker growth, higher welfare spending and greater pressure on the NHS.”
According to some estimates, illness-related inactivity costs the wider economy £212 billion a year — almost 70% of annual income tax receipts — through lost output, welfare payments and additional healthcare costs.
The Office for Budget Responsibility (OBR) expects spending on health and disability benefits for working-age people alone to reach £72.3 billion by 2029–30.
Mayfield said the surge was being fuelled by a “sharp rise” in mental health conditions among younger workers and chronic musculoskeletal problems — such as back pain and joint issues — among older staff.
His taskforce will also work with GPs, who he said often face pressure from patients to issue sick notes but find it difficult to assess whether someone could work in a modified role.
Business groups broadly welcomed the taskforce but warned that parts of Labour’s Employment Rights Bill risk discouraging firms from hiring people with existing health conditions.
The Bill includes guaranteed hours and restrictions on zero-hours contracts — measures that some retailers fear will make flexible hiring harder.
Helen Dickinson, chief executive of the British Retail Consortium, said retailers were committed to supporting employees with ill-health but that “the government’s goals and policies are at odds with one another.”
“While encouraging employers to invest in workforce health and provide flexibility, they risk making it more difficult,” she said.
In response to the report, the government announced a partnership with over 60 major employers, including Tesco, Google UK, Nando’s and John Lewis, to test new health and wellbeing initiatives aimed at reducing sickness absence and improving return-to-work rates.
Over the next three years, these programmes will form the basis for a voluntary national workplace health standard, expected by 2029.
Work and Pensions Secretary Pat McFadden said the partnership was “a win-win for employees and employers.”
“This is about keeping good, experienced staff in work and supporting people to stay healthy for longer,” he said.
Ruth Curtice, chief executive of the Resolution Foundation, said the review “accurately identified a culture of fear, a dearth of support and structural barriers to work” as key issues behind Britain’s worsening inactivity rate.
The CIPD, representing HR professionals, welcomed the focus on prevention. Its chief executive, Peter Cheese, said the report’s success “will depend on how well its recommendations are understood by business and backed by national and regional policymakers.”
Dr Roman Raczka, president of the British Psychological Society, said the shift toward “rehumanising the workplace” was overdue, but warned that not everyone could or should return to work.
“The workplace itself can be a root cause of poor mental health,” he said. “Those signed off sick deserve timely access to safe, compassionate care.”
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Ex-John Lewis boss warns UK faces £85bn sickness bill and economic crisis

OpenAI has signed a landmark $38 billion agreement with Amazon Web Services (AWS) to secure the immense computing power required to train and deploy its next generation of artificial intelligence systems — marking one of the biggest technology infrastructure deals ever struck.
The partnership, announced this week, will give the maker of ChatGPT access to vast fleets of graphics processors — including hundreds of thousands of Nvidia chips — hosted within Amazon’s cloud network. OpenAI will begin using AWS infrastructure immediately, with full deployment expected by the end of 2026 and room to expand further beyond 2027.
The move represents a significant shift for OpenAI, which until now has relied heavily on Microsoft’s Azure platform to power its models. The deal also underscores the intensifying race among cloud giants to dominate the lucrative AI infrastructure market. Following the announcement, Amazon shares surged to a record high, briefly valuing the company at more than $2.74 trillion, as investors hailed the agreement as a strong endorsement of AWS’s capabilities.
Sam Altman, OpenAI’s chief executive, said the partnership was critical to scaling what he called “frontier AI”. “Scaling frontier AI requires massive, reliable compute,” he said. “Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone.”
For Amazon, the deal serves as a powerful vote of confidence in AWS at a time when some analysts had questioned whether the cloud division was falling behind rivals Microsoft and Google in the AI race. The agreement ensures AWS remains central to the next phase of AI development — an arena now defined by unprecedented hardware and capital demands.
Industry analysts said the scale of the contract highlights how the economics of artificial intelligence have changed. Paolo Pescatore, analyst at PP Foresight, described it as “a hugely significant deal and a clear endorsement of AWS’s compute capabilities”. The deal also reflects how AI development has become a game of access — not just to algorithms and talent, but to computing power on a colossal scale.
OpenAI has been on a global dash to secure that capacity. In addition to the Amazon deal, it has signed agreements with Nvidia, AMD and Oracle to access more powerful processors and cloud data centres. Altman has previously said the company plans to invest around $1.4 trillion in computing resources over the coming years, targeting 30 gigawatts of infrastructure — enough to power roughly 25 million American homes.
The agreement also follows OpenAI’s internal restructuring with its largest backer, Microsoft, which valued the company at $500 billion and paved the way for it to evolve from a non-profit research outfit into a profit-driven business. The reorganisation transferred some control to a new non-profit foundation that holds equity in OpenAI’s commercial arm while removing Microsoft’s right of first refusal to supply its compute services — effectively clearing the path for the new partnership with Amazon.
However, the deal has reignited debate about whether the AI sector is heading into a speculative bubble. Nvidia, whose chips underpin most AI systems, last week became the world’s first $5 trillion company, its market value now roughly half the size of Europe’s entire benchmark equities index. Analysts warn that the rapid rise in valuations, coupled with vast capital outlays by AI developers, may prove difficult to sustain if the promised productivity gains do not materialise.
Despite those concerns, the OpenAI–Amazon deal sends a clear message: AI’s future will be shaped by those with the deepest computing resources. As cloud titans jostle for position, the partnership not only secures OpenAI’s access to power on an unprecedented scale but also cements AWS’s place at the heart of the global AI infrastructure boom.
For now, Altman appears undeterred by warnings of overheating. His stated ambition is to add one gigawatt of compute capacity every week — each unit carrying an estimated capital cost of more than $40 billion. If that pace continues, OpenAI’s collaboration with Amazon may only be the beginning of an even larger technological arms race redefining how artificial intelligence is built, trained and delivered worldwide.
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OpenAI strikes $38 billion deal with Amazon to supercharge AI computing power

Chancellor Rachel Reeves used a rare Downing Street address to lay the groundwork for her upcoming Budget, signalling that tough tax decisions lie ahead — but sought to pre-empt backlash by insisting the pressure on public finances “wasn’t our fault”.
In the speech, she said the UK economy was struggling not because of Labour’s policies but because of “longer-term factors” such as Brexit, decades of Tory austerity and rising global borrowing costs. “We must deal with the world as it is, not how we wish it could be,” she said.
Ms Reeves presented her forthcoming fiscal package as a choice between “investment and hope, or cuts and division”. She said she would do “what is right rather than what is popular”, placing emphasis on protecting the NHS, reducing national debt and improving the cost of living. But she also acknowledged that the measures required could mean pain for taxpayers — in particular the “wealthy” and property-owners — and carry consequences “for years to come”.
With the public finances projected to be weaker than expected, analysts estimate she may need to raise around £20 billion to £30 billion in additional revenue, despite last year’s historic tax rises.
Ms Reeves stressed that any future tax decisions were not being taken lightly: “Any Chancellor of any party would be standing here facing the choices I face,” she said, placing the blame squarely on previous governments and global shocks rather than her own policies.
She specifically cited a barrage of international headwinds — from US tariffs and conflicts in Europe to supply-chain disruption and jump-in borrowing costs — as having undermined Britain’s growth prospects. “The world has changed,” she said, “and we’re not immune to that change.”
Although she reaffirmed the manifesto promises not to raise VAT or tax working-people’s payslips, she stopped short of committing not to raise income tax, or altering thresholds — leaving open the possibility of a “wealth tax” or a hike in capital taxes.
Opposition parties seized on the remarks, warning that Ms Reeves was setting the stage for a significant tax raid disguised as a responsible Budget. Conservatives argued the Chancellor was laying the blame for her own ask on others.
With the next Budget scheduled for 26 November 2025, markets will be watching closely. Ms Reeves warned that if lenders and investors doubted her commitment to fiscal rules, the UK’s cost of borrowing could rise further — potentially forcing even deeper cuts or higher taxes.
In sum, the Chancellor has raised expectations of tough decisions while making it clear she will not be the one held solely responsible — outsourcing the blame to Brexit, austerity and global chaos. Whether the public accepts that framing — and whether her fiscal package delivers growth alongside the pain — remains the key question.
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Reeves shifts blame for looming tax rise to Brexit and austerity ahead of budgeting storm