People across Cambridgeshire could be hit by new tax rises and tighter public spending as Chancellor Rachel Reeves prepares her first full budget next month, warning that “those with the broadest shoulders should pay their fair share.”
Reeves, speaking in Washington at the International Monetary Fund's annual meeting, said she wanted to “get the balance right” between attracting wealthy investors and ensuring they contribute fairly to the public purse. The comments come as the Treasury faces what officials are calling a “£30 billion black hole” in the nation's finances.
For residents in Cambridge and surrounding areas, already grappling with rising housing costs, energy bills and public transport fares, the news signals another potential squeeze.
The Bank of England has warned that “administered prices,” such as bus fares and vehicle excise duty, continue to drive inflation. Stagecoach East recently increased local ticket prices, and Cambridgeshire homeowners have seen council tax bills climb above inflation this year.
Impact on local services and jobs
Reeves has hinted that both tax rises and spending cuts are on the table for her 26 November statement. Public sector workers across Cambridgeshire, including teachers, NHS staff and council employees, will be watching closely. The Chancellor has pledged not to raise VAT, but has not ruled out higher income or capital gains taxes for top earners.
In her interview with Sky News, Reeves said:
“I won't duck those challenges. The numbers will always add up with me as Chancellor.”
She blamed Brexit, austerity, and Liz Truss's mini-budget for the UK's economic troubles, adding that growth was being held back by years of instability. The Office for Budget Responsibility (OBR) recently downgraded productivity forecasts, leaving the government with a £20–30 billion gap to fill.
What it means for Cambridgeshire businesses
For the region's innovation and biotech sectors, particularly those in Cambridge's “Silicon Fen”, the Chancellor's remarks on pharmaceutical investment have sparked interest. Reeves said she is seeking fresh commitments from drug companies to invest in the UK in return for fairer pricing agreements with the NHS.
This could boost research activity in areas such as Addenbrooke's and the Cambridge Biomedical Campus, home to AstraZeneca and a cluster of life sciences firms.
Local business leaders have urged the government not to deter investment through aggressive taxation. “Cambridgeshire's economy relies heavily on innovation and inward investment,” said one Cambridge Network member. “We need stability and incentives, not more uncertainty.”
Looking ahead
The Chancellor is expected to announce her autumn budget on 26 November, outlining how she intends to close the fiscal gap while tackling inflation, which remains among the highest in the G7.
While Reeves has ruled out a full wealth tax, she has confirmed further action on non-domiciled taxpayers and luxury items such as private jets.
For families, small businesses and councils across Cambridgeshire, the next six weeks will bring intense speculation, and growing concern, about where the Treasury's cuts and tax rises might fall.
Planning ahead for tax changes
With potential tax rises and spending cuts on the horizon, now's the time for Cambridgeshire businesses to take stock. Careful planning can help you stay compliant, protect profits, and prepare for whatever the Chancellor announces next month.
At WJB Finance, your trusted accountant in Huntingdon, we help businesses across Huntingdonshire and Cambridgeshire navigate uncertainty with confidence, from tax planning and forecasting to cashflow management and strategic advice.
Book your free 30-minute consultation today. Let's discuss how WJB Finance can help your business stay resilient, make informed decisions and plan ahead for a changing economy.