Overview
- The Times and others report the Chancellor has listed an income tax increase among the 'major measures' sent to the OBR, the clearest sign yet she may break Labour’s pledge.
- One option under review is a 'two‑up, two‑down' package with a 2p income tax rise paired with a 2p national insurance cut likely focused on earnings below £50,270, shifting more of the burden onto pensioners and landlords.
- Officials are working to close a widely cited £20–30 billion shortfall after an OBR productivity downgrade, with pressure to build a larger fiscal buffer than the roughly £10 billion headroom previously targeted.
- Business groups including the CBI urge creating real headroom and coupling any rises with pro‑growth reforms, while the Tony Blair Institute advises that any manifesto‑breaching moves be temporary and reversed before the next election.
- Some Labour figures warn of damage to trust if the pledge is broken, even as unions back taxing higher earners, and the Bank of England says uncertainty over tax plans is already weighing on spending and investment.