Rachel Reeves: I was wrong to say no big tax rises would be needed

The shadow chancellor has admitted that she was wrong to rule out the possibility of tax increases in the future

Rachel Reeves, the shadow chancellor, has admitted that she was wrong to rule out the possibility of tax increases in the future.

In an interview with the Guardian, Reeves said that she had previously said that she would not raise taxes on income, VAT or national insurance, but that she now believes that this may be necessary in order to fund public services.

Reeves said that she had come to this conclusion after seeing the state of the public finances, which have been hit hard by the Covid-19 pandemic.

The government has borrowed heavily to fund the pandemic response

The government has borrowed heavily to fund the pandemic response, and the national debt is now at its highest level since the Second World War.

Reeves said that this level of debt is unsustainable, and that it will be necessary to raise taxes in order to reduce it.

She said that she understands that tax increases are unpopular, but that they are sometimes necessary in order to fund essential public services.

Reeves said that she would only raise taxes as a last resort

Reeves said that she would only raise taxes as a last resort, and that she would first look for other ways to save money.

She said that she would also try to ensure that any tax increases are fair, and that they do not disproportionately affect the poorest in society.

Reeves' admission that she may need to raise taxes is a significant shift in Labour's policy.

The party has traditionally been opposed to tax increases, but Reeves' comments suggest that she is willing to consider them if necessary.

It remains to be seen whether Reeves will actually raise taxes if she becomes chancellor.

However, her comments suggest that she is prepared to do so if she believes that it is necessary to fund public services and reduce the national debt.