Kwarteng warns October Budget will bring tax rises and more borrowing
Former chancellor Kwasi Kwarteng says the 28 October Budget is likely to bring further tax rises and more borrowing, citing fiscal drag, capital gains tax and higher debt interest costs.
The Full Story
A plain summary built from the channels that reported this story.
Former chancellor Kwasi Kwarteng has said he expects the government to raise taxes again in the 28 October Budget. In a broadcast interview, he argued that ministers have shown no appetite for cutting welfare spending while defence spending is set to rise, leaving higher taxes as the likely route.
He said capital gains tax was among the areas under discussion and that keeping thresholds unchanged would create fiscal drag, pulling more people into higher tax as inflation lifted wages. He also said he saw no sign that the government would reduce spending on welfare, and noted its commitment to more defence spending.
Mr Kwarteng said the Chancellor's inheritance was worse than the one he faced in 2020. He pointed to higher debt levels and higher interest rates, meaning both the amount borrowed and the cost of servicing it had increased.
He claimed Labour had raised taxes by around £66bn over two years, including £40bn in its first Budget in 2024 and about £26bn in last year's Budget. He said further increases were very likely but would have to be by stealth because of manifesto commitments not to raise income tax, VAT or National Insurance.
He raised concerns about an exit tax on assets for people leaving the UK. He cited Chris Rokos, a billionaire he described as a friend, who he said paid £330m in tax last year, equivalent to around 55,000 basic-rate taxpayers, and had moved to Greece. Other wealthy people had also left, he said.
Mr Kwarteng also argued that the tax and benefit system was discouraging work. He said four in five jobs had gone to foreign workers since 2010, which he called a catastrophic failure under the Conservatives, though he added the problem had developed over decades and that Labour was making it worse. He said some people faced a choice between a badly paid job and claiming benefits worth around £27,000 a year.
He also responded to a Mail on Sunday report that traders had placed £7bn of bets against the pound ahead of the Budget. He said this suggested traders believed the government would borrow more and would not reduce spending.
On screen
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Key Claims
Claims reported during this story's coverage, grouped by how many channels reported each one. Select a dot to see the source excerpt.
| Claim |  |
|---|---|
| Only on one channel | |
| Kwarteng expected further tax rises in the 28 October Budget. | |
| Kwarteng said higher debt and interest rates had worsened the Chancellor's fiscal inheritance compared with 2020. | |
| Kwarteng said traders thought the government would increase borrowing rather than cut spending. | |
Channel Perspectives
What each channel focused on, with key quotes.
GB News gave over a studio interview with former chancellor Kwasi Kwarteng to preview the 28 October Budget, with the host and guest broadly aligned on the likelihood of further tax rises. The segment was critical of Labour's record on tax, borrowing and work incentives, and it highlighted Kwarteng's warnings about wealth flight and the benefit system. It also used the Mail on Sunday's currency-bets story to reinforce the argument that the government will borrow more rather than cut spending.
- “So I suspect they'll raise taxes again.”
- “I think it's worse, because you've got much higher debt levels and the interest you're paying on the debt is higher.”
- “It's very likely that they will have to do that. But it will have to be by stealth, because of those red lines in the Labour manifesto and not putting up income tax, VAT or National Insurance.”
Broadcast Timeline
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