Reeves reserves right to take action ‘at any point’ to support public finances

UK economyAdd to myFTGet instant alerts for this topicManage your delivery channels hereRemove from myFTRachel Reeves reserves right to take action ‘at any point’ to support public financesUK chancellor believes decision to bolster fiscal headroom will mean she does not need to take extra steps in springRachel Reeves told a Treasury select committee on Wednesday: ‘It was the right thing to increase that headroom further to £21.7bn, given the world in which we live today’ © House of CommonsRachel Reeves reserves right to take action ‘at any point’ to support public finances on x (opens in a new window)Rachel Reeves reserves right to take action ‘at any point’ to support public finances on facebook (opens in a new window)Rachel Reeves reserves right to take action ‘at any point’ to support public finances on linkedin (opens in a new window)Rachel Reeves reserves right to take action ‘at any point’ to support public finances on whatsapp (opens in a new window) Save Rachel Reeves reserves right to take action ‘at any point’ to support public finances on x (opens in a new window)Rachel Reeves reserves right to take action ‘at any point’ to support public finances on facebook (opens in a new window)Rachel Reeves reserves right to take action ‘at any point’ to support public finances on linkedin (opens in a new window)Rachel Reeves reserves right to take action ‘at any point’ to support public finances on whatsapp (opens in a new window) Save Sam Fleming and George Parker in LondonPublishedDecember 10 2025Jump to comments sectionPrint this pageUnlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Rachel Reeves has said she reserves the right to take action “at any point” after she was asked whether a further fiscal repair job was possible as soon as the spring on top of last month’s £26bn tax-raising package. The chancellor said her decision to bolster her budget headroom to nearly £22bn, coupled with a move to commission assessments of compliance with the Treasury’s fiscal rules only once a year, means she should not need to take any action in the spring. But while insisting that she wants to hold only one fiscal event a year, Reeves declined in a Treasury select committee hearing on Wednesday to rule out taking extra steps to raise tax or curb spending if necessary. “I reserve the right to be able to take action at any point, but I believe the headroom that we have and the changes we have made means I won’t need to do that in the spring,” she said. “Of course I reserve the right at any time to take action.”Show video infoShow video descriptionVideo descriptionTranscriptRachel Reeves says she reserves the right to take action “at any point” to bolster the public financesYes, you've given me that opportunity, I'd be delighted to. Um, I, I reserve the right, uh, to be able to take action at any point, um, but I believe the headroom that we have and the changes that we've made, uh, means that I won't need to do that in the spring, but of course I reserve the right at any time, uh, to take action. Thank you for.Rachel Reeves says she reserves the right to take action 'at any point' to bolster the public finances © Parliament TVReeves was testifying to MPs after her November Budget, in which she extended a freeze on personal tax thresholds as part of an effort to raise more revenue to strengthen the public finances and pay for welfare reversals. Reeves’ decision to leave her options open contrasts with her tone after the October 2024 Budget, when she declared she would not be coming back to the public for more taxes or borrowing after her £40bn package. Under changes announced by the chancellor last month, the Office for Budget Responsibility now judges whether the government is on track to meet its fiscal rules only once a year, alongside the autumn Budget. This is intended to cement Reeves’ vow to hold only one major fiscal event a year. But the OBR will still present a set of forecasts in the spring, and these will make it clear if there has been any deterioration in the fiscal outlook that means the Treasury is off track against its rules, which require it to fund day-to-day spending with taxes by the end of the parliament and get the public debt burden falling.“It was the right thing to increase that headroom further to £21.7bn, given the world in which we live today,” Reeves said. She said very few countries held two fiscal events a year and added that she was determined to hold only one as recommended by the IMF.The Budget included a heavily backloaded set of tax rises, as well as spending restraint intended to come into effect at the end of the parliament. Reeves said the Budget would pull down government borrowing costs and reassure markets. “I want to bring down those borrowing costs, and fiscal consolidation is part of that,” Reeves said.Despite the pressure on the public finances, the chancellor ruled out replacing the pensions triple lock with a “single lock” for the rest of the parliament. She also said she would not be introducing capital gains tax on people’s primary residences, after speculation that such a move was on the cards in the lead-up to the Budget. Show video infoShow video descriptionVideo descriptionTranscriptRachel Reeves says Budget leak was 'incredibly damaging and frustrating'Sort of journalist who was. It was not an off the record briefing, it was a leak. It was, you're really clear it was I'm absolutely categorical that that was not an authorized briefing. It was incredibly damaging and frustrating. That is why we have a leak inquiry. It was not briefing that was signed off by me, any of my ministers um or officials. It was unacceptable. That is why there is a leak inquiry going on.Reeves said the Budget leak was 'incredibly damaging and frustrating' © Parliament TVAppearing alongside senior civil servants, the chancellor expressed her frustration at pre-Budget leaks, including the Financial Times’ report that she had abandoned plans to raise income tax rates. James Bowler, Treasury permanent secretary, added that the FT story was the “main focus” of his Budget leak inquiry. The piece on November 13 had been “incredibly damaging and frustrating”, said Reeves. “It was not an off-the-record briefing. It was a leak. It was not an authorised leak.” She added: “It was not a briefing signed off by me or any of my officials. It was unacceptable.”Reeves said: “We cannot allow this to happen again.”Reuse this content (opens in new window) CommentsJump to comments sectionPromoted Content Follow the topics in this article Tax Add to myFT UK Budget Add to myFT UK economy Add to myFT UK politics Add to myFT Rachel Reeves Add to myFT Comments