Chancellor says first budget may include tax rises with 'difficult decisions' to come

Taxes are likely to rise in the Labour government's first budget, the chancellor, Rachel Reeves, said. Speaking on The News Agents podcast, she declined to rule out increases in inheritance tax and capital gains taxes, or pensions reforms.

- Eleni Courea

"I think that we will have to increase taxes in the budget," she told the podcast, but ruled out raising National Insurance, VAT and income tax. Labour's manifesto committed to not increasing those three taxes during this parliament.

The budget will take place on 30 October, and Reeves warned there were "more difficult decisions to come". Her words are likely to be seized on by the Conservatives who have accused her of laying the ground for tax rises.

In a statement to MPs on Monday the chancellor accused the last Conservative government of leaving a £22bn black hole in the public finances. She claimed Jeremy Hunt, the former Tory chancellor, had lied to parliament and the country about the state of public spending.

"Jeremy Hunt covered up from the House of Commons and the country the true state of the public finances.

He did that knowingly and deliberately," she told Sky News yesterday.