Chancellor Rachel Reeves has urged Labour MPs to rally behind her upcoming Budget, insisting that party unity is essential as the government prepares to unveil a plan likely to include tax increases.
Addressing Labour’s Parliamentary Party on Monday evening, Reeves stressed that MPs must “stick together” if they hope to secure victory in the next general election. The Budget will be presented on Wednesday after weeks of speculation over potential tax and spending measures.
Reeves said she expected MPs to support the vast majority of the Budget—“around 90 to 95 percent”—but warned they must also accept the tougher elements. “This is a package, not a pick-and-mix,” she said. “You can’t say you like the cola bottles but not the fruit salad. It all hangs together.”
The chancellor outlined three core priorities: lowering the cost of living, reducing NHS waiting lists, and cutting the cost of debt.
Reactions to the meeting were mixed. One Labour MP described Reeves as “strong and honest,” while another suggested her urgent appeal for unity sounded “desperate.”
Over the past year, Reeves has faced growing internal criticism, particularly after being forced into several U-turns, including reversing cuts to winter fuel payments. Concerns also escalated over rumours she may raise income tax rates—something that would have broken Labour’s manifesto commitments. The government now appears to have backed away from that idea.
Instead, Reeves may extend the freeze on income tax and national insurance thresholds, drawing more people into higher tax brackets over time. She may also explore new taxes on luxury property, electric vehicles, and gaming companies, alongside smaller adjustments such as:
- limiting pension contribution tax relief
- reducing Cycle to Work scheme benefits
- cutting the tax-free allowance on cash ISAs from £20,000 to £12,000
She also indicated plans to abolish the two-child benefit cap, while keeping the pensions triple lock in place.
The Budget must close a public finance gap estimated at around £20bn while satisfying Reeves’s own fiscal rules on debt and borrowing.
Criticism has already begun. Conservative shadow chancellor Mel Stride warned the Budget may shift the tax burden from workers to welfare. The Confederation of British Industry called on Reeves to avoid a “death by a thousand taxes” for businesses. Meanwhile, Liberal Democrat Treasury spokesperson Daisy Cooper accused Labour of hypocrisy over frozen tax thresholds.
