Chancellor Rachel Reeves has ditched controversial plans to break Labour’s manifesto pledge and raise income tax rates.
The chancellor had been expected to hike income tax in the face of a large gap in her spending plans, hinting as recently as Monday that the alternative would be “deep cuts” to public investment.
It is now understood, in plans first reported by the Financial Times, that Reeves has abandoned those plans over fears they could anger both voters and backbench Labour MPs.
ITV News’ Political Editor Robert Peston reports the U-turn was triggered by improved data on current and expected wage growth, increasing forecasts of future tax revenues, and therefore narrowing the gap in the public finances facing the chancellor.
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