Rachel Reeves, the Chancellor, shared her approach to managing stress, mentioning that she enjoys listening to Beyoncé while running, during a conversation with Chris O’Shea, CEO of Centrica, at a CBI event at the Labour conference. Although many executives received Reeves positively, the nature of discussions indicated she may face ongoing pressure in her role.
In multiple interviews, Reeves confirmed that an increase in taxes is expected in the upcoming budget, following last year’s significant £40bn rise. When questioned about her previous commitment to avoid further borrowing or tax increases, she acknowledged changes in circumstances over the past year.
A proposed policy of lifting the two-child benefits cap, costing an estimated £3.5bn, adds complexity to the fiscal situation. During a conference session, Reeves highlighted the strained public finances, noting that the reversal of previous benefits reforms would incur an annual cost of £7bn.
Discussions among backbench MPs and campaigners focused on potential tax adjustments. Some government officials hinted at possibly reevaluating the party’s tax pledges, which currently include commitments not to alter VAT, income tax, or national insurance contributions. Chief Secretary to the Prime Minister Darren Jones noted that decisions regarding the manifesto are still pending.
While the Treasury has traditionally maintained these tax pledges, some members are open to new options, although Reeves reportedly does not support revisiting the manifesto commitments. Last year’s budget included substantial tax increases targeting higher earners, which could inform upcoming decisions.
The extent of any radical changes may depend on the financial gap identified by the Office for Budget Responsibility, with signals indicating a preference for growth-oriented modifications.
Reeves aimed to bolster Labour’s standing among the business community, which remains cautious due to previous announcements, including increased employer national insurance contributions. Business leaders expressed concerns about the potential implications of these tax policies on employment, particularly with regard to youth unemployment initiatives.
The conference revealed a mixed reception from the business sector, with attendance lower than in previous years, prompting discussions on the overall tax burden, ongoing projects, and the need for sustained engagement moving forward. As the conference concluded, many in the business community expressed a wait-and-see attitude ahead of the upcoming budget announcements.
Source: https://www.theguardian.com/business/2025/sep/30/rachel-reeves-makes-her-pitch-to-business-chiefs-wary-of-another-tax-raid