[Offical Thread] Budget 2025: Chancellor expected to raise taxes

Ultimately the British people voted for taxes rises. So they shouldn't complain when they have to pay them.

You say that the British people voted for tax rises. Did they?
The Labour election manifesto explicitly pledged not to increase the basic, higher or additional rates of Income Tax or VAT. Breaking that promise is now reportedly under consideration. Indeed, it is arguable that the promise has already been broken with the increase in employers' National Insurance in last year's Budget.
Opinion among Labour MPs and Party members is apparently fairly evenly divided over whether breaking this pledge is worth the risk, politically. Several opinion polls (for what they are worth) have confirmed that raising Income Tax rates would be opposed by a significant majority of the public. A recent YouGov poll found that around two-thirds (65%) of Britons would oppose such a move, while about one in five (22%) say they’d support it.
So the question is this. What’s least unpopular: is it raising taxes or is it failing on public services and the cost of living?
As Steve Akehurst, the director of political analysts Persuasion UK put it, “The worst place they can end up in is to raise taxes by enough to annoy people, but not enough that they deliver on anything that people care about.”
And to add, verbatim, the concluding comment in a recent Guardian article, "Implementing a manifesto-busting tax rise without successfully changing the things people most care about – help with the cost of living, improvements to the NHS, tackling Channel crossings and reducing child poverty – would see Labour plumb even lower depths of unpopularity than it already is."
The lesson for all our politicians must be: next time, tell the truth.

The British people did vote for increased taxes. In failing to spot this, you demonstrate the same amnesia and poor understanding of Britain's economic and fiscal situation that is sadly endemic among the British electorate.
The decision to vote for higher taxes did not occur on the 4th July 2024. It occurred over the last 14 years when the voters consistently voted for an anti-growth, anti-investment and anti-productivity policy called austerity. British voters also voted for Brexit despite being clearly warned it would harm the British economy (recent research implies that the economic harm is worse than previous estimates). When you combine these voting decisions with an increasing dependency ratio pushing up government spending that is a consequence of an aging population, higher taxes were inevitable.
We are seeing the very same scenario played out at local government level where Reform promised council tax cuts. Any informed person saw this was pure fantasy as statutory spending commitments are swallowing up council budgets but Reform voters earnestly voted expecting cuts. Now they are getting council tax increases.
Ideally politicians shouldn't lie, but they do. It gets them elected because the electorate are not informed enough to see through their lies. Inevitably we are going to see a paroxysm of anger directed against Reeves and Labour. That energy would be better spent on reflecting on how the British electorate have contributed to the current state of Britain because, like with the increase in non-EU migration in the wake of Brexit, I'm getting fed of telling people 'I told you so'.

14/11/2025
And now, with just under two weeks before the Budget:
Budget 2025: Starmer and Reeves ditch plans to raise income tax
"The prime minister and chancellor have spent weeks laying the groundwork to make the manifesto-breaking announcement on 26 November, but won't go ahead with it amid fears it would further anger Labour MPs and voters...
Insiders clearly concluded that the ill mood in the party, coupled with the recent hits to the PM's political capital, makes manifesto-breaking tax rises simply too risky right now.
But it also adds to a sense of chaos, given the chancellor publicly pitch-rolled tax rises in last week's news conference."
https://news.sky.com/story/starmer-and-reeves-ditch-plans-to-raise-income-tax-in-budget-13470025
Streeting backs scrapping income tax rise
'Health Secretary - and leadership hopeful, according to some - Wes Streeting has been speaking to LBC this morning. And it appears he is on board with the decision taken by Rachel Reeves not to increase income tax in the budget.
"I'm not in favour of breaking manifesto pledges," he says.
"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." '
It remains to be seen what the consequences of this unexpected turn of events will be but it clearly highlights the disarray at the heart of the Government.

As I have argued many times in this forum, both the Labour and Conservative Parties were less than honest about the dire state of the UK’s economy and public finances during the 2024 general election campaign, raising false hope and unrealistic expectations.

Look at a weekday of a typical working man. Assuming 8 hours sleep they have 16 waking hours in the day, 8 of which are spent at work plus an hour in the middle of those 8 hours for lunch and then an hour either side getting to and from work. That's 11 of your 16 waking hours doing something you'd rather not be doing.
You do it of course to make money, but it's pretty common for nearly half the money you've earned to be deducted before it reaches your bank account. Then whether you own or rent there's no getting around paying a significant amount of your untaxed income on council tax. If you do buy a property that's more of your income you need to spend on tax (stamp duty). Then when you need something to be repaired you pay 80% to the builder and 20% on tax (VAT).
You also have to pay tax every year on the car you need to get you to work. In order for the car to run you need petrol which is more money on tax. You take the car to the mechanic for repairs, once again it's 80% to the mechanic and 20% on tax. Then at the end of a long boring week you want to unwind with a few beers down the pub which means paying more tax. You put some money away for a rainy day which loses value even with interest but you still have to pay tax on interest (I know you have ISAs but there's a limit to how much you put in and that amount looks likely to get reduced).
Aside from all these other ways of paying tax there's the fact more and more of us are paying 40% tax. Some say if you earn £50k then you can afford 40% tax but £50k really doesn't go that far anymore.
40 hours a week on the minimum wage will give you an annual salary of £25,396.80 so the level where you start paying 40% tax is just under twice the minimum wage.
When the minimum wage was first introduced in 1999 and 40 hour week would give you an annual salary of £7,488. Therefore the equivalent wage of £50,270 (where 40% starts) in 1999 relative to minimum wage was £14,821.62. That was by no means a bad salary in those days but it certainly wasn't a great one. The actual 40% level was £32,335 which in todays money relative to minimum wage is £109,669.50. You're being penalised in more ways than simply paying 40% tax when you reach that level.
That's not to mention that if you receive things like medical benefits at work then it's technically an additional salary that you pay tax on and can push you into the 40% band.
If more people paying 40% tax meant better services then fine. But in 1999 the bin men came once a week, it was the norm for dentists to be NHS and potholes on the road were rare enough that if there was one then all the locals would know where it was. Now the binmen come every other week and if you want your garden waste collecting that's extra. NHS dentists have now all but vanished. As for the roads, it's a novelty to drive down one that doesn't need repairing.

That was going to be the justification, of course. But it would have meant an indisputable breach of Labour's manifesto pledge. The risk would be that its political opponents would argue, in every election in the foreseeable future, that Labour can never be trusted to keep its promises, which potentially would render such a move tantamount to electoral suicide.
It seems, therefore, that leading figures in the Labour Party, such as Wes Streeting and Lucy Powell, who were against the idea for precisely that reason, have prevailed.
The danger now is that Rachel Reeves will not be able to raise enough revenue from an untidy mix of other equally unpalatable measures to satisfy the financial markets and meet her own fiscal rules, let alone bring about meaningful improvements in public services or living standards. Hence Martin Kettle's point: the Government is dammed if it raises Income Tax, and dammed if it doesn't.

Look at a weekday of a typical working man. Assuming 8 hours sleep they have 16 waking hours in the day, 8 of which are spent at work plus an hour in the middle of those 8 hours for lunch and then an hour either side getting to and from work. That's 11 of your 16 waking hours doing something you'd rather not be doing.
You do it of course to make money, but it's pretty common for nearly half the money you've earned to be deducted before it reaches your bank account. Then whether you own or rent there's no getting around paying a significant amount of your untaxed income on council tax. If you do buy a property that's more of your income you need to spend on tax (stamp duty). Then when you need something to be repaired you pay 80% to the builder and 20% on tax (VAT).
You also have to pay tax every year on the car you need to get you to work. In order for the car to run you need petrol which is more money on tax. You take the car to the mechanic for repairs, once again it's 80% to the mechanic and 20% on tax. Then at the end of a long boring week you want to unwind with a few beers down the pub which means paying more tax. You put some money away for a rainy day which loses value even with interest but you still have to pay tax on interest (I know you have ISAs but there's a limit to how much you put in and that amount looks likely to get reduced).
Aside from all these other ways of paying tax there's the fact more and more of us are paying 40% tax. Some say if you earn £50k then you can afford 40% tax but £50k really doesn't go that far anymore.
40 hours a week on the minimum wage will give you an annual salary of £25,396.80 so the level where you start paying 40% tax is just under twice the minimum wage.
When the minimum wage was first introduced in 1999 and 40 hour week would give you an annual salary of £7,488. Therefore the equivalent wage of £50,270 (where 40% starts) in 1999 relative to minimum wage was £14,821.62. That was by no means a bad salary in those days but it certainly wasn't a great one. The actual 40% level was £32,335 which in todays money relative to minimum wage is £109,669.50. You're being penalised in more ways than simply paying 40% tax when you reach that level.
That's not to mention that if you receive things like medical benefits at work then it's technically an additional salary that you pay tax on and can push you into the 40% band.
If more people paying 40% tax meant better services then fine. But in 1999 the bin men came once a week, it was the norm for dentists to be NHS and potholes on the road were rare enough that if there was one then all the locals would know where it was. Now the binmen come every other week and if you want your garden waste collecting that's extra. NHS dentists have now all but vanished. As for the roads, it's a novelty to drive down one that doesn't need repairing.

I think it will be obvious to most readers, from the title of the thread and the opening post, that what is at issue here is whether the electorate voted, in the 2024 General Election, for increases in the rates of Income Tax, National Insurance and VAT. As Labour won a plurality of the votes with an unambiguous promise not to increase these taxes it is clear that they did not.
The Government must now wrestle with the consequences of having made a promise it must have known at the time that, in all probability, it would not be able to keep.
As for your comments on "Britain’s economic and fiscal situation" I am only too well aware that the UK's deep-seated problems are the result of decades of woeful leadership on the part of successive governments. Indeed, I have said so in numerous posts, including (indirectly) in the article that I cited in the opening post of this thread. You appear to want to lay the blame at the door of the electorate. But they can only choose what is on offer to them - and those choices have proved to be less than inspiring.

Of course the electorate are to blame. They chose a course which has dug a huge hole for Britain.
Trying to shift the blame on to the very politicians or referendum results the electorate voted for despite being warned of the consequences of their voting decisions displays the same abdication of personal responsibility as an obese person blaming McDonald's for their corpulent appearance.

So which political party should they have voted for?
All governments over the past 50 years or so have been drawn from the three established political parties: Conservative, Labour and Liberal Democrat and they've all followed fundamentally the same centrist policies. Where was the choice? The electorate doesn't run the country, the Government does.
Voters can only choose what politicians and mix of policies are on offer to them at any one time. Often, this means voting for the lesser of two evils, or staying at home.They cannot then be blamed for the incompetence, greed and mendacity of the individuals in charge.
In failing to be honest with the public before the 2024 general election the Starmer Government has been the architect of its own demise. It is now every bit as unpopular as the Government it replaced, if not more so. This thread questions whether it should break its manifesto promises on tax. Many would say it already has. Others would argue that it's only a matter of time before it is forced to do so, either in the forthcoming Budget or later in this Parliament.