Overview
- Defence Secretary John Healey said weaker projections would have “consequences” and declined to restate Labour’s pledge not to raise income tax, national insurance or VAT.
- The Times reports the Treasury is considering targeting earners above roughly £45,000 as it models options to close a fiscal gap now enlarged by downgraded productivity.
- Raising the basic rate of income tax is under active debate, with a 2p increase discussed by ministers and larger rises modelled by analysts, though no decisions have been made.
- Officials are weighing measures including higher charges for top council tax bands, a possible 20% ‘settling‑up’ levy on wealthy leavers, and tighter pension and inheritance tax reliefs.
- The OBR has delivered forecasts that include about a £20 billion hit from weaker productivity, while Treasury sources say scoring continues on around 100 potential tax and spending measures.