UK Income Tax and the 2025 Budget: Will She Or Won’t She ?
Rachel Reeves has a thorny problem on her hands. She needs to decide within the next 3 weeks (i.e. before the budget on Nov 26 th ) whether to break the key manifesto promise Labour made in order to get themselves elected in 2024, i.e. not to raise Income Tax, VAT or National Insurance. She knows that breaking this promise will be a highly unpopular move, not least with her back-bench colleagues, and doing so, however justifiably in her eyes, could spell electoral suicide for the party. If the opinion polls are anything to go by, the process of Labour's decline started as soon as she announced the near abolition of WFP last July; it could really start to snowball in May of next year, in the aftermath of the predicted whitewash of Labour seats in the next round of local elections. The chancellor is also facing the increasingly gloomy financial outlook for the UK prophesied by the OBR, and is desperate to give herself as much financial ‘headroom’ as possible wit...