Rachel Reeves eyes £40bn in tax rises and spending cuts in Budget

Chancellor Rachel Reeves is looking to make tax rises and spending cuts to the value of £40bn in this month’s Budget, government sources have told the BBC.

At a political cabinet meeting this morning, Reeves told ministers that filling the “£22bn black hole inheritance from the previous government” would only be enough “to keep public services standing still”.

Reeves is now drawing up plans to find £40bn in order to avoid real-terms cuts to departments, sources say, as first reported in the Financial Times and the Times.

She warned ministers there would be “difficult decisions on spending, welfare, and tax” to come in her October Budget.

The chancellor is finalising details of her first Budget, to be announced on Wednesday 30 October.

She recently said there would be “no return to austerity” under this government and promised a boost to government investment, designed to kickstart growth.

A HM Treasury spokesperson said: “We do not comment on speculation around tax changes outside of fiscal events.”