Income tax – live: Markets spooked after Reeves U-turn on major Budget tax increase
Streeting welcomes U-turnHealth Secretary Wes Streeting welcomed the apparent U-turn over plans to break Labour’s manifesto commitment on income tax.Mr Streeting told LBC Radio: “I’m not in favour of breaking manifesto pledges.“I think that trust in politics and politicians is low and it’s part of our responsibility to not only rebuild our economy and rebuild our public services, but to rebuild trust in politics itself.”He added: “The fact that the Chancellor – and we’re going on speculation here – but the fact that the Chancellor was reported as even considering breaking manifesto commitments tells you two things: Firstly, the public finances are under real pressure, and secondly she is fundamentally, unequivocally, committed to her fiscal rules and so therefore she’s got some invidious choices to make, and she’s weighing those up.“I’ve not spoken to the Chancellor overnight. I’ve seen the reports this morning that she’s no longer planning to increase income tax.“I think what the news overnight has shown is that people speculate on the Budget but ultimately you don’t know what’s in it until the day it’s delivered, and that includes the Cabinet, by the way.“So we will all have to wait and see.”Health Secretary Wes Streeting said it was ‘important that we keep the promises that we made to the public at the last general election’ (James Manning/PA) (PA Wire)Athena Stavrou14 November 2025 15:53Chancellor's income tax U-turn 'due to improved economic forecasting'The Chancellor is reported to have abandoned plans to hike income tax at the Budget because of improved economic forecasting.Reports overnight suggested a major tax rise was no longer planned for the 26 November financial statement.The strength of tax receipts has improved the numbers from the Office for Budget Responsibility, according to the PA news agency, allowing for the U-turn.This is particularly the case on stronger wage performance because the higher wages are, the more tax is paid on them.A downgrade in productivity is also not been as bad as was first feared.The latest measures were thought to have been submitted last week, rather than being a knee-jerk response to the turmoil in No 10 this week sparked by a briefing war.Chancellor Rachel Reeves is set to outline her Budget later this month (Justin Tallis/PA) (PA Wire)Athena Stavrou14 November 2025 15:21Sarwar urges Reeves to scrap two-child cap in BudgetThe leader of Scottish Labour has urged Chancellor Rachel Reeves to scrap the two-child benefit cap when she announces her Budget this month.Anas Sarwar said on Friday he wanted to ensure the Budget would not see a “return to austerity”, reduced energy bills and tackled child poverty – which he said could be done by ending the cap.Speaking during a visit in Glasgow, the Scottish Labour leader said: “I think three things have to come from that Budget.“It has to be a budget that confronts child poverty, and that’s why I want to see the end of the two-child benefit cap.“It has to improve living standards, that’s why we’ve got to have a package to lower energy bills.“And third, we can’t return to austerity like we had under the Conservatives.“That has to be the fundamentally different approach this Labour Government takes.”Anas Sarwar (PA Wire)Athena Stavrou14 November 2025 14:46Reeves' former top adviser warns ditching tax rise will 'overcomplicate' systemRachel Reeves’s former top adviser has joined leading economists in warning that her decision to abandon income tax rises in the upcoming Budget and pursue smaller interventions will “overcomplicate” the system.Jim O’Neill, the former Treasury minister and Goldman Sachs boss who was brought in by the chancellor to be her economic adviser in opposition, described the developments as “bothersome”.He said: “I’m surprised. If it means their defaulting to accumulated fringe, possibly growth-damaging taxes again, it will be bothersome.”Jim O’Neill (PA)Athena Stavrou14 November 2025 14:20The taxes Rachel Reeves could raise after income tax hike abandonedAn income tax rise has reportedly been ruled out by Rachel Reeves in a last-minute turnaround ahead of the Budget, amid fears that breaking Labour’s manifesto pledge could anger voters and backbench Labour MPs.Here are some of the other options the chancellor may be considering ahead of the Budget on 26 November:Athena Stavrou14 November 2025 14:01Streeting refuses to rule out desire to become PMStreeting refuses to rule out desire to become PMAthena Stavrou14 November 2025 13:44Badenoch calls on Reeves to 'abandon all plans' for tax risesTory leader Kemi Badenoch said Chancellor Rachel Reeves “needs to abandon all plans to raise taxes”.Speaking on a visit to a generator hire firm in Writtle in Essex, Ms Badenoch said: “The problems we are having now were caused by her last budget.“The last disastrous budget is creating a need for the new problems that she wants to create.“What we’re asking her is to learn the lessons from that last budget and just stop the tax rises altogether.“So if they’re not going to raise income tax, that’s good – I don’t know whether it’s true or not, we have to wait and see – but we need to be stopping them from taxing property, pensions, savings, the works.”(Joe Giddens/PA Wire)Athena Stavrou14 November 2025 13:22Government is focused on making 'fairest possible choices', culture secretary saysThe Government is focused on making the “fairest possible choices” and easing “the pain that people have been put through”, Lisa Nandy said as she addressed reports suggesting a rise in income tax is now not coming at the Budget.Chancellor Rachel Reeves had hinted at the tax rise, but media reports overnight claimed it has been dropped.The Culture Secretary told Times Radio: “Of course, as you allude to, we don’t pre-empt budgets. Budgets are announced by the Chancellor.“They’re the subject of a lot of work and careful consideration and, in our case as a Government, about making the fairest possible choices so that we can help the economy to grow, and we can also ease the pain that people have been put through over the last decade-and-a-half.”Ms Nandy added that when the Budget is set out in “concrete details” on November 26, ministers will “make sure that those with the broadest shoulders bear the greatest burden in order to turn around the mess that we inherited and get the economy growing”.Tara Cobham14 November 2025 13:00Chancellor remains 'completely focused' on public interest, Nandy insistsThe Chancellor remains “completely focused” on the public interest, Lisa Nandy said as she faced questions about reports an income tax hike will be dropped from the Budget.The Culture Secretary told Sky News it would not be “helpful or right” to speculate about what is in the 26 November announcement.Asked if the latest speculation made it look like the government did not know what it was doing, Ms Nandy replied: “I’ve known the Chancellor well for 15 years now, and I can tell you that she is solely and fiercely focused on the challenges facing the country and doing what is in the best interests of the country.“She’s never been shy of facing people down in order to do that in opposition and in Government.“Over the course of the last few weeks, obviously I’ve had some discussions with her and her team about measures in the Budget that may affect my department, proposals that we’re making, and discussions that ordinarily happen across government, and in every one of those discussions, it’s been the public interest that she’s completely focused on.”Rachel Reeves and Culture Secretary Lisa Nandy (left), who has insisted the Chancellor will not play ‘fast and loose’ with people’s money (PA Wire)Tara Cobham14 November 2025 12:48Downing Street insists chancellor's 4 November speech 'still stands'Downing Street insisted that the Chancellor’s speech from 4 November “stands”, amid speculation she has U-turned on plans to raise income tax.The Prime Minister’s official spokesman said: “She was very clear about the challenges the country faces and her priorities in addressing those challenges. All of that still stands.”Tara Cobham14 November 2025 12:31
