Reeves urges Labour MPs to unite behind the Budget

Rachel Reeves has pleaded with Labour MPs to unite behind her Budget, promising to remain as Chancellor in the years to come.

During a meeting of the Parliamentary Labour Party (PLP) on Monday evening, Reeves cautioned MPs that if they wanted to win the next election, they must "stick together." Following weeks of rumours, the Budget—which is expected to include tax increases—will be delivered on Wednesday.

Reeves told Labour MPs she thought they would like 90-95% of her spending plan, but that they would have to accept the tougher measures as well.

"It's a package, not a pick-and-mix," she said. "You can't say that you like the cola bottles but you don't like the fruit salad. It all comes together and hangs together as a whole."

She stated that her three top priorities would be tackling the cost of living, lowering NHS waiting lists, and reducing the cost of government debt.

One Labour MP described the Chancellor as "strong and transparent" following the meeting, while another said she had sounded "desperate."

Protests and Discontent

Despite Reeves' call for unity, three Labour MPs attended a protest on Tuesday morning, joined by Green Party deputy leader Zack Polanski, urging the Chancellor to implement a wealth tax.

When asked why he was attending a protest with a senior figure from an opposition party, Labour MP Neil Duncan-Jordan said: "This is about an issue, not about what [rosettes] people are wearing. Our belief is that we should be taxing those with the broadest shoulders—they should be carrying the heaviest load."

Labour MPs have been increasingly critical of Reeves' decisions in the year since the last Budget. On certain measures, including the Winter Fuel Payment, the Chancellor has faced intense pressure.

There had also been speculation within the party over reports that she might use this Budget to raise income tax rates, a move that would have violated the party's election manifesto pledge. The government now seems to have stepped back from that plan. Instead, it is considering extending the freeze on income tax and National Insurance thresholds, meaning more people will be dragged into paying higher tax on their wages and pensions over time (a process known as fiscal drag).

In addition, the Chancellor is considering a number of smaller measures to raise funds, such as new taxes on high-value homes in England, electric vehicles, and gambling businesses.

She needs to find more money to comply with her own fiscal rules aimed at lowering debt, while closing a 'black hole' in public finances expected to be around £20 billion.

Reeves has also indicated she will maintain the two-child benefit cap, which limits benefits to parents for their third or subsequent children born after 6 April 2017.

Economic Measures

The 'triple lock' on pensions is projected to remain unchanged, meaning the state pension will likely rise in line with average wage growth. The National Living Wage is also expected to rise.

Ministers have confirmed that pre-packaged milkshakes and lattes will be subject to the sugar levy as a result of the Budget.

Mel Stride, the Shadow Chancellor, expressed concern that the Budget would see "taxes on hard-pressed, hard-working people."

Rain Newton-Smith, Director-General of the Confederation of British Industry (CBI), warned Reeves not to inflict "death by a thousand taxes" on companies during a conference on Monday. She suggested the Chancellor should have "the confidence to make two difficult decisions rather than 20 easier ones."

Daisy Cooper, the Liberal Democrat Treasury spokesperson, accused the government of "outright hypocrisy" over the forthcoming tax reforms.

"Rachel Reeves once accused the Conservatives of 'picking the pockets' of working people by freezing tax thresholds, but now Labour intends to do exactly the same," she said.