Rachel prepares the ground, needing a sticking plaster for the weeping wound

This morning Chancellor of the Exchequer denied that any of it was her fault, in her Speech To The Nation delivered outside number 11.

In a twenty minute delivery she has effectively given the country notice that tax rises are on the way.

Commenting upon Rachel Reeves’ speech this morning, Bina Gayadien, partner at law firm Spencer West LLP stated that:,

"Rachel Reeves prepares the ground for a tax rising budget later this month, potentially breaking pledges set in Labour’s Manifesto.

No details were announced today.

However, given her fiscal constraints, tax rises for some or all may be bold and unpopular, but necessary according to the Chancellor.

A rise in the VAT rate is unlikely given that it directly impacts the cost of living, but tax increases on capital gains, wealth and pensions are looking more certain.

For now the speculation continues."

While Hilesh Chavda, also at Spencer West LLP stated that:

"Rachel Reeves’ speech this morning marks an unusual step, underscoring the challenging position she currently faces.

The emphasis on ‘protecting families’ could be more than rhetoric. It may signal significant policy shifts ahead.

The Chancellor could be signalling changes to Capital Gains Tax, property taxation, and even the introduction of a wealth tax or exit tax.

If so, this could represent a major recalibration of fiscal priorities for many."

Charlotte Sallabank, Tax partner at Katten Muchin Rosenman LLP commented that:

"In view of Rachel Reeves’ statement that ‘each of us must do our bit’ it seems likely that income tax rates will increase, not just an extension of the freezing of the personal allowance, so an increase in the basic rate of income tax can be expected.

There may well also be an increase in the higher and additional rates rather than a reduction in the threshold for these rates, in keeping with her aim that ‘those with the broadest shoulders should pay their fair share of tax’ and there is always the possibility that she will introduce a further rate of tax income tax to tax those that she considers to be the super wealthy.

However, if she does that, coupled with the potential introduction of employer’s NIC on LLP members’ profit shares, there is likely to be an acceleration in high earners moving to more welcoming tax regimes, such as Dubai and Milan, with the tax yoke being borne by those with slighter shoulders."

From what I heard of her talk she explained that the UK has a massive debt that she will have to counter with big tax rises in her Budget later this month.

None of what she said will have been of any surprise to the public - the market however fell over 100 points in reaction.

Suggestions are now that she will need to raise over £26bn of taxes to use as some form of sticking plaster for the weeping wound of the UK economy.

It is not her fault!!!!