Is this the way Rachel Reeves can go for broke and put 2p on income tax?

The Resolution Foundation is a fine organisation that does high-quality economic research, and its latest report has some good ideas for November’s Budget, which is shaping up to be a defining event of this government.

But it seems to fudge the essential question, which is whether Rachel Reeves should explicitly break Labour’s manifesto promise not to raise any of the big four taxes: income tax, national insurance, VAT and corporation tax.

It suggests that the chancellor should half-break the promise by putting up income tax and cutting national insurance contributions at the same time.

It is a clever proposal, as hiking income tax by 2p in the pound while cutting national insurance by the same amount would actually raise £6bn a year – because income tax, unlike national insurance, is paid by pensioners and on income from property and other investments.

Thus, Reeves could raise a useful amount while arguing that she hadn’t actually broken the manifesto pledge because she had simply switched the burden from one tax to another. That kind of sophistry is unlikely to go down well, however. The punishment she has taken for claiming that hiking employers’ national insurance didn’t break the pledge because it is not a tax on “working people” has primed public opinion to be outraged at further betrayals.

The difficulty of avoiding a rise in one of the main taxes that raises the most revenue has prompted some commentators to suggest that Reeves and Keir Starmer should simply put up income tax – and accept that the manifesto promise was unsustainable.

That course has some attractions. It would get the government off the hook of scrabbling around for stealth taxes, each of which raises a small sum.

The Resolution Foundation, for example, has some constructive suggestions that would raise a few billion each, such as raising the tax on soft drinks, a carbon tax on long-haul flights and shipping, increasing the duty on heavier vehicles (a “Chelsea tractor” tax), and cutting the threshold for small businesses to register for VAT. These may be more relevant than wishlists from most think tanks because Torsten Bell, the former head of the foundation, is now a minister advising Reeves on the Budget.

But all these ingenious wheezes for squeezing a billion here and a billion there may not be enough to bridge the ever-widening gap between planned spending and forecast revenue.

Would it not be better to take the plunge and just put up income tax? It would be the fairest way of ensuring that additional revenue is raised according to ability to pay. It would not add to inflation. It would end the unfair tax break enjoyed by workers over the state pension age, the self-employed and the recipients of what used to be called “unearned income”. And it would allow ministers to be honest with the British people, saying that global prospects for growth have been hit by Donald Trump’s tariffs.

I am not convinced. It will be uncomfortable for Reeves – and for Starmer, because this will be his Budget as much as hers – to claim that they have not put up one of the forbidden taxes if they have extended its scope, or renamed a part of it, or pretended, say, that people earning over £80,000 a year are not “working people”.

But they should remember an iron law of politics: however bad things are, it is always possible to make them worse. I think an explicit manifesto breach would be more damaging than the embarrassment of splitting hairs and insulting the voters’ intelligence.

Even the Resolution Foundation’s plan to switch the tax burden from national insurance to income tax and pretend it is not a tax increase would, I think, be better than simply putting up income tax. There is only so much honesty that British voters can take.