Rachel Reeves rules out rumoured tax grab - 'we don't need it'

The Chancellor has ruled out introducing a wealth tax to help the Government balance its books. Downing Street has previously refused to dismiss calls for a wealth tax amid reported pressure from Labour backbenchers and former leader Neil Kinnock.

Speaking at the Labour Partyconference in Liverpool, Rachel Reeves warned the UK is economy will face "further tests" in the coming months but in an interview, said a wealth tax was not being considered. Experts have said Ms Reeves will have to increase taxes or cut spending to fill a black hole in her upcoming Budget on November 26. The National Institute of Economic and Social Research think tank has estimated the gap in public finances could be as much as £50 billion, although the Chancellor has previously rejected this figure.

Speaking to Bloomberg TV at the party conference, Ms Reeves confirmed there will be no wealth tax.

She said: "We already have taxes on wealthy people; I don't think we need a standalone wealth tax. I'm not even sure it would work."

Labour stalwart Diane Abbott is said to be among the backbenchers pushing for the Government to bring in a wealth tax to help fill the black hole.

In her interview with Bloomberg, Ms Reeves also said Labour still stands by its election vow to not raise income tax, national insurance, VAT sales tax or corporation tax ahead of next month's Budget.

She said: "Those commitments stand, and they stand for a reason, because working people paid a heavy price in the last Parliament."

But in her party conference speech, Ms Reeves warned the UK is facing "harsh global headwinds" and hinted at further tax rises to come in the Budget.

The Labour frontbencher insisted she would keep control of the public finances and would "not take risks with the trust placed in us by the British people".

However, she acknowledged her choices had been made "harder" by international events and the "long-term damage" done to the economy.

Ahead of her keynote speech, she warned "the world has changed" since she promised business chiefs she would not repeat the tax raid of her first Budget.

Ms Reeves told the conference: "In the months ahead we will face further tests, with the choices to come made all the harder by harsh global headwinds and the long-term damage done to our economy, which is becoming ever clearer."

The Chancellor said she would "not take risks with Britain's economic stability", adding: "I will make my choices at that Budget.

"They will be choices to take our country forward.

"And whatever tests come our way, whatever tests come my way, I make this commitment to you: I will take no risks with the trust placed in us by the British people."

Speaking to Sky News after the speech, senior Cabinet Office minister Darren Jones - in contrast to Ms Reeves' comments to Bloomberg - failed to rule out whether Labour would stick by its manifesto commitment to not raise VAT, income tax or national insurance for working people.