The political air in Westminster is thick with expectation as Chancellor Rachel Reeves prepares to deliver a rare pre-budget address from Downing Street this morning.
Her reflections come amid swirling rumours that the government may be preparing the public for duty rises ahead of the important awaited Budget 2025, set for 26 November.
While the Labour Party pledged restraint on income duty, public insurance, and Handbasket, both Prime Minister Sir Keir Starmer and Ms Reeves have dropped subtle, but clear, hints that the profitable reality may force a rethink.
“I will make the choices necessary to deliver strong foundations for our economy, for this year, and years to come,” Ms Reeves is expected to say.
Her unusual early speech has raised eyebrows across Westminster. Political insiders, including Sky News’ Beth Rigby, described it as “highly unusual”, with Treasury officials reportedly urging the Chancellor to “prepare the ground and make the argument for another big tax-raising budget.”
Starmer Warns of ‘Tough but Fair’ Choices
Sir Keir, addressing Labour MPs on Monday evening, gave a flavour of what’s coming.
“It’s becoming clearer the long-term impact of Tory austerity, their botched Brexit deal and the pandemic on Britain’s productivity is worse than even we feared,” the Prime Minister told colleagues, describing the backdrop to the upcoming Budget 2025 as “difficult”.
So it looks like Keir Starmer will allow Rachel Reeves to break Labour’s key manifesto pledge not to increase tax on ‘working people’ and increase income tax for the many!
Meanwhile, Keir Starmer’s Labour government will ignore 80% of British millionaires and not tax the few! pic.twitter.com/pOd46i4Aqw
— B heard media ❤️ (@bheardmedia) November 3, 2025
He continued: “Faced with that, we will make the tough but fair decisions to renew our country and build it for the long term.”
Such remarks have fuelled speculation that Reeves may indeed break from Labour’s earlier tax promises.
Fiscal Gap and Tax Options on the Table
Sources close to the Treasury suggest the Office for Budget Responsibility( OBR) is poised to downgrade its UK productivity read by around 0.3 chance points.
That shift could open a financial gap of over to£ 30 billion, placing further pressure on the Chancellor to find new profit avenues.
Among the options reportedly under consideration is an offer from the Resolution Foundation, a left-leaning think tank with close ties to government.
Their idea raises income tax by 2p while cutting public insurance by the same quantum, a move designed to bring in redundant finances without burdening workers disproportionately.
The think tank was formerly headed by Labour MP Torsten Bell, now a key adviser to Ms Reeves and serving as pensions minister.
NHS, Cost of Living, and Fairness at the Core
Reeves’s address is expected to place heavy emphasis on fairness, fiscal responsibility, and protecting essential public services.
“It is important that people understand the circumstances we are facing, the principles guiding my choices – and why I believe they will be the right choices for the country,” the Chancellor will say.
She’s set to reaffirm her commitment to three core goals: reducing the national debt, tackling the cost of living crisis, and safeguarding the NHS.
“It will be a budget led by this government’s values,” she will add.“Of fairness and opportunity and focused squarely on the priorities of the British people: protecting our NHS, reducing our national debt and improving the cost of living.”
It’s not common for a Chancellor to make such a statement weeks before a budget. But with Budget 2025 shaping up to be one of the most politically sensitive financial events in years, Reeves appears determined to control the narrative early.
Her message is clear: hard choices are coming, and Labour wants to frame them not as betrayals of promises but as necessities for stability.
As the countdown to Budget 2025 continues, all eyes will be on Downing Street, and on how far Reeves and Starmer are willing to stretch Labour’s fiscal pledges in the name of economic renewal.
