Overview
- Rachel Reeves used a rare pre‑Budget speech to warn that “each of us must do our bit,” declining to recommit to Labour’s promise not to raise income tax, National Insurance or VAT.
- Economists estimate a sizeable shortfall in the public finances, commonly put at £22–26 billion, with one institute suggesting the gap could reach about £50 billion.
- A rumoured Resolution Foundation plan would raise income tax by 2p and cut employee National Insurance by 2p, a swap designed to shield workers but not pensioners, and the Treasury refused to comment on such speculation.
- AJ Bell analysis suggests pensioners could face higher bills under an income‑tax‑up/NI‑down approach, with around £450 extra tax at £35,000 of income and about £1,049 at £65,000.
- Financial markets reacted to the speech, with sterling falling and the FTSE initially dropping, as opposition parties attacked the prospect of breaking the manifesto pledge and some Conservatives urged Reeves to quit if she raises taxes.