Articles by Sophie Huskisson

Technology

Bombshell signal Rachel Reeves plans to increase income tax in Budget

Rachel Reeves has reportedly told the Budget watchdog that she is planning to hike income tax in her November 26 statement. In a bombshell signal of her plans, the Chancellor is said to have let the Office for Budget Responsibility (OBR) know that an increase in personal taxation is one of the "major measures" on tax she is considering announcing. Ms Reeves is reportedly considering a 2p rise in income tax and a 2p cut in national insurance, the Times reported . It would appear an attempt to move the burden of tax rises away from workers and on to other people, such as pensioners and landlords. The cut to national insurance would only apply to people who earn below £50,270, with the rate going from 8% to 6%. Richer people who earn over £50,270 would not get a cut, under the plans being considered. Ms Reeves's plans are not confirmed and she could still go back on any considerations, but her having submitted them to the OBR is the clearest sign yet of her plans to break the manifesto pledge to not hike income tax. The OBR will come back with its assessment of the impact of such a tax hike next week. Deputy Labour leader Lucy Powell, who was elected to take over from Angela Rayner , last night warned Ms Reeves not to break Labour's manifesto pledges, which includes a hike to income tax. Asked about Ms Powell's comments, Housing Secretary Steve Reed this morning refused to comment on Budget measures, but insisted Labour was delivering on its manifesto. He told Sky News: "Well, you'll know no member of the government can comment on the budget in the in the days ahead of the budget coming through, but absolutely on the manifesto we are getting on to deliver it. The reason there's been investment in the NHS to provide 5 million additional appointments, which is what we've done to cut waiting lists, is because that was a key promise in our manifesto. "The reason that we've increased the national minimum wage is to give millions of our lowest paid workers in this country a pay rise that was in the manifesto. The reason that we introduced a ban on the multi million pound bonuses the water bosses were paying themselves for overseeing record levels of pollution in our water is because it was in the manifesto. We will get on and we will deliver that manifesto over the course of this Parliament." The Chancellor earlier this week refused to stand by Labour's election promise not to hike income tax, VAT, or national insurance. She admitted she'd have to make tough decisions in her Budget in order to priorities cutting NHS waiting list, get the cost of living down and reduce national debt. Speaking from Downing Street on Tuesday, Ms Reeves appeared to put the country on notice for tax hikes in a rare pre-Budget speech - warning "each of us must do our bit". She said: "I have to face the world as it is, not the world as I want it to be." Asked whether it would be acceptable break the promise, Ms Powell said on Thursday: "We should be following through on our manifesto, of course. There's no question about that." Speaking to BBC Radio 5 Live, the Manchester Central MP added: "Trust in politics is a key part of that because if we're to take the country with us then they've got to trust us and that's really important too." She added: "If we're to take the country with us then they've got to trust us. We want to make sure that ordinary working people are better off as a result of this Labour government and we're putting more money back into the pockets of ordinary working people. That's what that manifesto commitment is all about. And that's what this Budget will be about I'm sure." An HM Treasury spokesman said: “The Chancellor has set out the context for the Budget, recognising global and long-term economic challenges. It will continue to build the strong foundations to secure Britain’s future and on the priorities of the British people - cutting waiting lists, cutting national debt and cutting the cost of living.”