Keir Starmer has fuelled speculation that Labour may raise income tax in the autumn budget after refusing to reaffirm the party’s election pledge not to increase income tax, national insurance or VAT. Questioned in the Commons, he cited bleak new productivity forecasts from the Office for Budget Responsibility, which have deepened the £20 billion gap facing Rachel Reeves. Treasury officials are modelling options including a 1p or 2p rise in the basic rate of income tax, possibly offset by cuts to national insurance, to raise up to £8 billion annually. Reeves is also considering freezing tax thresholds, potentially drawing more workers into higher bands, and reviewing the windfall profits levy on oil and gas firms to encourage new investment. Starmer, while claiming there would be 'no return to austerity', said the poor fiscal inheritance from the previous government demanded 'difficult choices’. Critics accused Labour of preparing tax rises because it cannot control spending, while supporters argue that fair reform is needed to restore economic stability. See also

The UK’s largest tax increase since 1993 was announced as Rachel Reeves introduced a budget aimed at revitalising healthcare, education, and infrastructure. Taxes will rise by £40 billion, with employer national insurance contributions, capital gains tax, and VAT on private school fees among the primary targets. These funds, coupled with higher borrowing, aim to close a financial gap left by previous administrations, supporting the NHS, affordable housing, and transport projects. Reeves acknowledged the 'difficult decisions' required, defending these increases as essential to 'rebuild Britain' without directly impacting individual income tax, VAT, or national insurance. Critics argue, however, that these tax hikes may still burden working people indirectly. In response to Tory criticisms, Reeves insisted that Labour’s approach will prevent austerity and 'put more pounds in people’s pockets' while providing relief measures for small businesses and the retail, hospitality, and leisure sectors.

The chancellor pledged increasing public spending amid higher than expected economic growth. Whitehall departments will receive a rise of £150bn over the course of this parliament, the largest increase this century. There is extra money for schools, tax cuts for businesses and a cut in air duties for internal flights. A changed alcohol duty will see cheaper sparkling wine and draught beer, and the planned fuel duty rise is cancelled. Amid huge concern over the £20 cut to Universal Credit, changes will be made to let working claimants keep more of their benefits. There is new money for the NHS, a rise in the National Living Wage, and public sector pay rises. The Institute for Fiscal Studies said inflation and higher taxes on incomes would negate small wage increases for middle earners. Low-income households will see the cost of living increase faster than benefit payments. The chancellor acknowledged in his budget that families are under strain: see