WASHINGTON (Reuters) -British finance minister Rachel Reeves said on Thursday she would like to have a bigger fiscal buffer to cope with volatile global markets, but that creating one in her budget next month would involve trade-offs on tax and spending.
“Would I like more headroom? Of course I would. But that does come with trade-offs because more headroom requires more tax revenue or less spending on public services like the NHS,” Reeves told reporters in Washington where she is attending meetings of world finance officials.
“So you’ve got to get the balance right there,” Reeves told reporters.
On Wednesday she said she was looking at tax and spending measures for her next budget on November 26, having raised taxes by 40 billion pounds in her first fiscal plan last year.
Asked about the possibility of higher taxes on banks to help raise the revenues she is likely to need, Reeves said she wanted to ensure that Britain is “a great place to do business” and she highlighted recent investments by U.S. financial firms.
“It’s not all about tax, but I do want to have a competitive environment for all businesses in Britain,” adding that she did not dispute industry assessments that British taxes on financial services were relatively high.
“Of course, though, we do want to make sure that everyone pays their fair share of taxes, and you’ve got to get the balance right there,” she added.
She repeated a previous comment that she did not plan to introduce a new wealth tax in her budget.
“I want Britain to be a great place for talent, for entrepreneurs, for successful individuals to come, and that requires getting the balance right,” Reeves said.
“But I do think that those with the broadest shoulders should pay their fair share of tax, and you can see that through my actions last year at the budget,” she said.
(Reporting by David Milliken in WashingtonWriting by William James and editing by William Schomberg in London)
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