Rachel Reeves has refused to rule out the possibility of increasing taxes for millions of Britons, stating that everyone will need to "contribute" to rectify the º£½ÇÊÓƵ economy.
In a speech delivered on Tuesday (November 4), the Chancellor indicated this year's Budget would aim to tackle low productivity, rein in inflation to stimulate new interest rate reductions, and concentrate on lowering debt levels to decrease borrowing costs.
She declined to specify which taxes might be raised at the Budget later this month, but acknowledged the nation is facing "big challenges", many of which have arisen since last year's £40bn tax increase on businesses and other groups across the º£½ÇÊÓƵ.
"When I was appointed Chancellor, people put their faith in me to take our country forward, not to be swayed by political convenience, not to always do what is popular," stated Reeves.
"I will continue to deliver on the priorities of the British people, cutting NHS waiting lists, cutting the national debt and cutting the cost of living," as reported by .
"If we are to build the future of Britain together, we will all have to contribute to that effort. Each of us must do our bit for the security of our country and the brightness of its future."
Reeves noted that making the right decisions comes with a "reward for getting these decisions right", hinting that she would create more leeway to "withstand global turbulence" and to enable the government to be "freer to act when the situation calls for it".
The speech occurred three weeks before Reeves presents her Budget, where she could confront a £30bn fiscal shortfall.
The Office for Budget Responsibility (OBR), the fiscal watchdog, is anticipated to reduce productivity trend projections, increasing costs confronting the Chancellor.
Several rumoured tax measures have emerged over recent months, with various think tanks and business leaders urging Reeves to abandon a Labour Party manifesto pledge and increase income tax to generate enhanced revenue levels.
The Chancellor said she wanted Britons to "understand the circumstances we are facing" and the "principles guiding my choices".
She described the speech as the "courteous thing to do" ahead of challenging announcements later this month.
"I think it's important that people are honest and as I said I think everyone can see this year has thrown many more challenges our way."
Whilst Reeves maintained last year's tax raid "fixed the foundations", she declared: "Since that Budget, the world has thrown even more challenges our way. The continual threat of tariffs has dragged on global confidence, deterring business investments and dampening growth.
"Inflation has been too slow to come down, as supply chains continue to be volatile, meaning the costs of everyday essentials remain too high and the cost of government borrowing has increased."
Her address in Downing Street also highlighted Labour's pledge to overhaul the welfare system, although it remains uncertain whether modifications will be implemented before this Budget.
"The Prime Minister, the secretary of work and pensions and this whole government are committed to reforming our welfare state. That is not a system that counts the costs of failure, but one that invests in success and protects those who need it most.
"There is nothing progressive about refusing to reform a system that is leaving one in eight young people out of education or employment."
Reeves also targeted the Conservatives and Reform over their economic proposals, which she claimed would reduce public investment and fail to stabilise the º£½ÇÊÓƵ economy.
The Conservatives promised to deliver £47bn in savings to finance tax reductions, including scrapping stamp duty on primary residences.
Meanwhile, Nigel Farage vowed to implement spending reductions before cutting taxes should Reform secure electoral victory.
"My opponents will tell you that they could do more. Reform º£½ÇÊÓƵ promise savings from our public services, and yet in Kent County Council and councils they run across Britain, apparently they can't find a single penny, and instead going to increase council tax for more than 2m people."
Shadow Chancellor Mel Stride described the speech as an acknowledgement that Reeves' "first Budget was a failure".
"With an emergency press conference, she is all but confirming what many feared, higher taxes are on the way," Stride said. "If Rachel Reeves breaks her promises yet again, Keir Starmer must take responsibility and sack her. The country needs a Chancellor with a plan and a backbone."
