Minister declines to rule out possibility of new taxes

A minister has declined to rule out the possibility of new taxes, as Rachel Reeves is seeking to slash public spending in her Spring Statement.

The Chancellor will deliver a statement on March 26 in response to the latest forecasts from the Office for Budget Responsibility (OBR) watchdog.

It is expected that increased borrowing costs and weak economic growth mean that spending cuts are likely, in order to meet her commitments on managing the public finances.

Industry minister Sarah Jones said on Thursday that Ms Reeves will make decisions “in the national interest” but would not speculate on any decisions that could be coming.

She added: “We know that we are waiting for the OBR, that we are looking at our spending, that we are investigating every penny that we spend in government, so that we are spending taxpayers’ money wisely.”

Asked again whether tax rises could be coming, Ms Jones said: “I’m not going to speculate on anything that may or may not come from the Chancellor. Those are her decisions to make, and she will make them in the national interest.”

The savings in the statement are expected to come from the welfare bill and a drive for greater efficiency across Whitehall.

The BBC reported earlier this week that the OBR was to put its proposals to the Government on Wednesday as part of the forecasting process.

A leaked early draft of the forecast indicates the watchdog is cutting its forecast for economic growth and the cost of Government borrowing will have been affected by the turbulence in the bond markets in January.

At the time of the Budget in October, the watchdog said Ms Reeves had £9.9 billion of headroom against her self-imposed rule to fund day-to-day spending through tax revenues rather than extra borrowing.