Conservative response to embargoed warning the Chancellor must raise taxes to plug her £40bn black hole

Wednesday, 6 August 2025 00:01

Sir Mel Stride MP, Shadow Chancellor, said: “Experts are warning Labour's economic mismanagement has blown a black hole in the nation's finances which will have to be filled with more tax rises - despite Rachel Reeves saying she wouldn't be back for more taxes. Labour will always reach for the tax rise lever because they don't understand the economy. Businesses are closing, unemployment is up, inflation has doubled and the economy is shrinking. And Labour are...Request free trial

Sir Mel Stride MP, Shadow Chancellor, said:

“Experts are warning Labour's economic mismanagement has blown a black hole in the nation's finances which will have to be filled with more tax rises - despite Rachel Reeves saying she wouldn't be back for more taxes.

Labour will always reach for the tax rise lever because they don't understand the economy. Businesses are closing, unemployment is up, inflation has doubled and the economy is shrinking. And Labour are refusing to rule out more damaging tax rises on investment.

Only the Conservatives, under new leadership, believe in sound money and low tax.”

ENDS

Notes to Editors:

Labour have broken the economy:

Latest official figures show growth of the economy has gone backwards. Monthly real gross domestic product (GDP) is estimated to have fallen by 0.1 per cent in May 2025 (ONS, GDP monthly estimate, 11 July 2025, link).

The unemployment rate increased to 4.7 per cent in March-May 2025. The unemployment rate is 0.5 percentage points higher than the 4.2 per cent unemployment rate that Labour inherited from the Conservatives (ONS, Labour Market Statistics, 17 July 2025, link).

Inflation is almost double the Bank of England's 2 per cent target. The Consumer Prices Index (CPI) rose by 3.6 per cent in the 12 months to June 2025, compared with 3.4 per cent in the 12 months to May (ONS, Consumer Price Index, 18 June 2025, link).

The tax burden is increasing to a ‘historic high'. In the March 2025 Economic and Fiscal Outlook, Office for Budget Responsibility (OBR) said taxes would rise from 35.3 per cent of gross domestic product (GDP) to a ‘historic high' of 37.7 per cent in 2027-28 (OBR, Economic and Fiscal Outlook, 26 March 2025, link).

Rachel Reeves promised not to raise taxes or borrow more:

After her Autumn Budget, Rachel Reeves said she was ‘not coming back' with more taxes or more borrowing – a promise she is preparing to break. Speaking to business leaders Reeves said: ‘I'm really clear, I'm not coming back with more borrowing or more taxes'. However, when asked whether she was prepared to rule out tax rises after the welfare U-turn, Rachel Reeves said: ‘I'm not going to, because it would be irresponsible for a chancellor to do that. We took the decisions last year to draw a line under unfunded commitments and economic mismanagement. So we'll never have to do something like that again. But there are costs to what happened' (The Guardian, 4 July 2025, link; BBC News, 25 November 2024, link; GB News, 11 June 2025, archived).