Chancellor Rachel Reeves has given her biggest indication yet that tax rises will be included in this year's Autumn Budget, following the Labour Government's "damaging" U-turn on Personal Independence Payment (PIP) reforms in the Welfare Bill earlier this week.
After dropping key welfare reforms, analysts have warned the Treasury will need to plug a £5billion "black hole" in the public finances if the Chancellor's strict fiscal rules are to be kept.
Prime Minister Keir Starmer's Government were forced to axe an introduction of strict eligibility rules for the disability benefit after intervention from backbench Labour MPs, with Reeves warning "there are costs to what happened".
When asked about potential tax raids by The Guardian, the Chancellor said: "I’m not going to, because it would be irresponsible for a Chancellor to do that.
The Chancellor has hinted tax rises are on the horizon
GETTY / PA
"We took the decisions last year to draw a line under unfunded commitments and economic mismanagement. So we’ll never have to do something like that again. But there are costs to what happened."
Despite signaling a likely HM Revenue and Customs (HMRC) raid, the Chancellor hinted that her strict fiscal rules will likely remain in place, asserting Labour will "continue to keep that grip on the public finances".
Reeves added: "I’m not going to apologise for making sure the numbers add up,” she said. “But we do need to make sure that we’re telling a story, and a Labour story.
"We did that well in the Budget and the Spending Review, we increased taxes on the wealthiest and businesses. In the Budget last year, I made it really clear that priorities in that budget were to protect working people, to invest in the NHS and to start rebuilding Britain."
Prime Minister Keir Starmer's Government has been forced to U-turn on the benefits bill
GETTYFollowing the Government's U-turn, Work and Pensions Minister Sir Stephen Timms is set to lead a review into the impact of disability benefit cuts on stakeholders.
He is set to work disability benefit groups as part of a review, a move which has been publicly welcomed by the Chancellor.
"It’s been damaging, I’m not going to deny that, but I think where we are now, with a review led by Stephen Timms who is obviously incredibly respected and has a huge amount of experience, that’s the route we’re taking now," Reeves said.
"That’s the right thing to do. It is important that we listen in government, that we listen to our colleagues and listen to what groups outside are saying as well."
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According to the latest YouGov polling, the majority of Britons are against cutting the amount of money that disabled people receive in benefits.
Some 53 per cent are opposed to any cut in benefits aimed at supporting disabled people who are able to work with 74 per cent opposed to cuts impact those who are unable to work.
Notably, Labour voters are even more opposed to the cuts than the wider public, with 63 per cent against any that impact those in work and 79 per cent against cuts for those who cannot work.
Earlier this week, the Universal Credit and Personal Independence Payment Bill passed by 335 votes to 260.
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