Rachel Reeves ‘considering breaking Labour manifesto pledge with income tax raid’
Rachel Reeves is reportedly considering raising income tax in her Budget next month in what would be a major break of one of Labour’s main manifesto pledges.Sources have told The Guardian that she may raise income tax to fill a hole in the public finances estimated at between £30bn and £50bn. The paper reported the Chancellor is “nervous” about breaking such a major pledge, but some advisers in the Treasury and No 10 believe it may be the only way to raise enough money to make sure she does not have to raise taxes again this parliament.Before the election, Labour’s pledged no tax rises on working people.But one source said the Treasury is considering adding 1p to the basic rate, which would raise more than £8 billion. Another believes she will likely raise higher or additional rates, which would bring smaller sums of £2bn and £230m at rates beginning at roughly £50,000 and £125,000 a year.A senior official said there have been discussions about how much headroom Ms Reeves wanted to give herself, with some saying she wants more than the £10bn she accounted for at the spring statement.A senior official said there have been discussions about how much headroom Reeves wanted to give herself, with some saying she wants more than the £10bn she accounted for at the spring statement More
