Reeves Urges Labour MPs to Unite as Budget Set to Include Tax Rises

Chancellor Rachel Reeves has urged Labour MPs to rally behind her Budget, warning the party must “stick together” to win the next election. Speaking to Labour’s Parliamentary Party on Monday, she said MPs may like “90–95%” of the plan but must accept it “as a package”, joking that “you can’t pick the cola bottles and reject the fruit salad”.

The Budget, to be delivered on Wednesday after weeks of speculation, is expected to include tax rises. Reeves said her priorities are cutting the cost of living, NHS waiting lists and national debt. Some MPs described her speech as “strong and honest”, while others said she sounded “desperate”.

Despite her call for unity, three Labour MPs joined a protest on Tuesday — alongside Green Party co-leader Zack Polanski — urging Reeves to introduce a wealth tax. MP Neil Duncan Jordan said high earners should “carry the heaviest burden”.

Reeves has faced growing criticism over the past year, including U-turns such as reversing cuts to the winter fuel payment. There had been fears she would raise income tax rates, which would break Labour’s manifesto pledge. The government now appears to have dropped that idea, but may extend the freeze on income tax and national insurance thresholds, pushing more people into higher tax brackets.

To close an estimated £20bn gap in the public finances and meet fiscal rules, Reeves may also consider taxes on high-value homes, electric vehicles and gaming companies. Other options include limiting pension tax breaks, reducing Cycle to Work scheme benefits, and cutting the cash ISA allowance from £20,000 to £12,000.

Reeves has suggested she wants to scrap the two-child benefit cap, while keeping the state pension triple lock. The living wage is likely to rise, and the sugar tax will be extended to pre-packaged milkshakes and lattes.

Political and business criticism continues. Conservative shadow chancellor Mel Stride warned taxes could hit “hard-pressed” workers, while CBI chief Rain Newton-Smith cautioned against “death by a thousand taxes”. Liberal Democrat Daisy Cooper accused Labour of hypocrisy for freezing tax thresholds after criticising the Conservatives for doing the same.