Summary
Rachel Reeves, the Chancellor of the Exchequer, is considering increasing the basic rate of income tax in her upcoming Budget, which would be the first such increase in over 50 years. The decision could challenge a Labour Party manifesto promise not to raise certain taxes. Reeves has been preparing the public for potential unpopular tax decisions as the economic situation demands new approaches.
Key Facts
- The last time the basic rate of income tax was increased was in 1975, by Labour's Denis Healey.
- Rachel Reeves is the current Chancellor of the Exchequer facing the decision of whether to raise this tax rate.
- A tax increase would break a long-standing precedent and contradict a Labour manifesto promise not to increase certain taxes.
- Reeves used a Downing Street press conference room for her announcement, highlighting the significance of the upcoming decision.
- Economic pressures are leading to considerations of previously avoided tax increases.
- Reeves' plans are aimed at addressing what she describes as necessary economic choices.
- The Labour Party's election manifesto promised not to raise income tax rates or VAT.
