Rachel Reeves ‘set to ditch plan to raise income tax’ in Budget
Chancellor could abandon income tax hike plan
- Chancellor Rachel Reeves has reportedly abandoned plans to raise income tax in the upcoming Budget.
- The decision was made due to fears of angering voters and backbench Labour MPs by breaking a key manifesto pledge.
- She had previously indicated that avoiding an income tax hike would necessitate “deep cuts” to public investment.
- Raising income tax would have helped to address an estimated £50 billion fiscal black hole.
- Alternative strategies to meet fiscal rules may now include increasing a wider range of smaller taxes or reducing income tax thresholds.