Overview
- Reeves refused to recommit to Labour’s pledge not to raise income tax, VAT or national insurance and would not rule out an income tax increase.
- Reports say the Treasury is considering a Resolution Foundation plan to raise income tax by 2p while cutting national insurance by 2p, presented as a switch to spread the burden more widely.
- Options under review include steep council tax changes for the highest property bands, with scenarios that could double Band G and H bills, affecting over one million homes and prompting concern for pensioners.
- Economists put the fiscal gap at roughly £22bn, potentially higher, with an expected OBR productivity downgrade likely to further squeeze the Chancellor’s headroom.
- Opposition figures warned of serious political consequences, with calls for Reeves to be sacked if she breaks the election promise on the main taxes.