Reeves Weighs Tax Rises Amid Budget Shortfall

Chancellor Rachel Reeves is facing a large Budget shortfall—estimates range from about £20bn after an OBR productivity downgrade up to £30–40bn—prompting consideration of tax rises and spending cuts despite Labour manifesto pledges. Reeves says she will build "sufficient headroom", stick to self-imposed fiscal rules and centre the November Budget on growth, but has not ruled out breaking pledges and is reportedly reviewing around 100 measures. Options under consideration include a 1p–2p rise to the basic income tax rate, changes to the 45p top rate or its threshold, wealth levies such as a "mansion tax" on homes over £2m, higher capital gains tax on expensive properties, and harmonising gambling duties. Those proposals have prompted industry warnings: estate agents and housebuilders say a mansion tax could chill London’s market, racing figures warn gambling tax changes could cost jobs, and supermarket bosses warn higher business rates would push up food inflation. Campaigners and some Labour figures want measures targeting the wealthy, while commentators and personal finance experts warn tax rises risk damaging growth, squeezing household spending and harming the party’s political standing.