Chancellor Rachel Reeves Expected to Break Labour Income Tax Pledge

Rachel Reeves, the Chancellor, is preparing to break Labour's manifesto promise by potentially raising income tax in her upcoming Budget, with speculation of a tax increase of up to £30 billion. In an unusual early morning speech at Downing Street, she is expected to address the worsening state of public finances and argue for increased investment rather than spending cuts to stimulate the economy and support public services. Downing Street has not reaffirmed Labour’s pledges to avoid raising income tax, VAT, or National Insurance, fueling concerns about tax hikes. Sir Keir Starmer has warned Labour MPs that the Budget will involve tough decisions but insisted they will be fair, while Conservatives have urged the Prime Minister to sack Reeves if she breaks tax promises. Reeves is reportedly considering a 2p increase in the basic rate of income tax, the first such rise in 50 years, a move that could partially offset other fiscal measures. The Chancellor’s decision is seen as a risky political gamble given historical backlash against similar manifesto breaches.