Overview
- The chancellor said “each of us must do our bit” and refused to rule out increases to income tax, National Insurance or VAT ahead of the 26 November Budget.
- Treasury options reported by think tanks and media include a 2p rise in income tax offset by a 2p cut in employee NI, extended freezes to tax thresholds, and higher council tax for top bands.
- The Resolution Foundation says the 2p income‑tax/2p NI swap could raise about £6 billion, while IFS modelling suggests doubling Bands G and H could raise around £4.2 billion and affect more than one million homes.
- Reeves framed the choices as necessary to meet fiscal rules and protect services, pointing to weaker productivity, stubborn inflation, tariff uncertainty and higher borrowing costs.
- Political opponents warned of a broken manifesto promise and urged consequences, as the OBR prepares updated forecasts expected to crystallize a £20–30 billion gap to be addressed in the Budget.