Rachel Reeves has abandoned plans to break Labour’s manifesto pledge and raise income tax at this month’s Budget – and the decision has sparked a heated debate among Independent readers.
Some argue that the speculation over an income tax rise, and the subsequent U-turn, has created unnecessary uncertainty, with the chancellor appearing to waver between manifesto promises and the need to fill a growing fiscal black hole.
Critics suggested this flip-flopping is fuelling distrust, both among voters and within Labour ranks, as MPs worry about the political and economic consequences of either choice.
Others pointed out that the abandonment of a headline income tax hike may simply be a pragmatic move, with Reeves now likely to rely on smaller, targeted tax measures to bolster public finances.
Yet even this approach was divisive: while some saw it as a fairer way to share the burden, others warned it risks making the system more complicated and inefficient, while failing to provide the fiscal certainty the economy needs.
For many readers, the debate is less about individual measures than about credibility and clarity. With the Budget looming, opinions are split over whether Labour’s chancellor is steering a steady course or merely fuelling a cycle of speculation and uncertainty.
Here’s what you had to say:
What happened to ‘purdah’?
I can remember when Budget contents were closely guarded secrets and the chancellor was in information "purdah" for weeks beforehand.
In retrospect, that seems far more sensible and grown-up than the unconvincing and instability inducing mixture of nudges and winks from the current Treasury team that merely confirm to the country and the markets that it hasn't got a grip on the economy as well as on so many other issues.
Django
Five months of uncertainty
Has there ever been a Budget so widely discussed, leaked, so many different proposals floated, dismissed, and commented on?
This has been going on for nearly five months now. Why can't the financial organisation of the country be dealt with once a year at a fixed date?
Magma
Ignore the speculation
Frankly, I ignore all this Budget speculation; most of it is attempts to score political points by scaremongering, etc.
I am confident that Reeves, the most qualified chancellor for two decades, will present exactly the budget our country needs at this time.
In my honest opinion, until Brexit is reversed, there’s not much chance of the recovery needed to deliver every demand.
Blame the Conservatives and Farage’s three-party incarnations for this.
voxtrot
There was never a plan
There never was a plan. Plans only exist after the Budget announcement. Before that, you just have possible ideas you are assessing. The hysterical and hyperbolic speculation is frankly ridiculous. I agree with those who say this speculation is possibly unhelpful and even damaging to the economy.
Strangely Enough
Unclear vision and tax policy
So what will she do then? Bringing more people into paying income tax seems to be the only solution – a solution which will not be accepted by many of her backbenchers, as those people vote Labour, let alone by the unions.
She has been reduced to shilly-shallying for months just to see the markets’ and her party’s reactions. She has no clear vision and cannot financially or economically rule any longer. Whatever she does, she must reduce corporation taxes, starting with the NI taxes which impair growth, because without growth, Labour is cooked, as ever more taxes will be needed in the future.
paul
Land and wealth taxes
Reeves is damned if she does and damned if she doesn’t.
She needs to just get on with releasing some of the obscene wealth tied up in land and mansions in this country back into the economy. She could start with a land value tax of a couple of percent on land holdings of over 200 hectares or £2m, and reform council tax on high-value properties as advocated by Martin Lewis.
A stepped progressive removal of personal allowance for those on incomes in and above the 40 per cent band and aligning capital gains tax rates with income tax rates and allowances would obviate the need for a rise in the basic rate of income tax. This would ensure those with the broadest shoulders pay their fair share.
Kernow
UK’s financial mess
Speculation is rife about what will or won’t change in the budget. Whatever the budget brings, one thing’s clear – the UK is in a mess. It was an impossible task for anyone to sort out the UK’s finances in four years, let alone one.
Is Reeves a capable chancellor? Hard to say, as she took on a task that many wouldn’t attempt and with a deficit that generations will pay for, leaving little chance of handing out anything to anyone.
Those responsible for Brexit have a lot to answer for. As one is fancying his chances as next PM, people need to wake up and smell the coffee. He and his supporters, not to mention the seriously wealthy, would welcome him as PM as they see it as their chance for greater financial freedom, as well as him ensuring they pay less tax – difficult in some cases, as many avoid tax by all and any means – whilst he enriches and empowers himself, seeing himself as a world leader, hobnobbing with the rich and famous, whilst the country sinks into greater despair and poverty.
If no one pays any tax, where does the money come from for education, NHS, police, prisons, social services, pensions, benefits, etc.? Everyone wants a decent country to live in, but seemingly an ever-increasing number don’t want to pay their share. Propaganda from the likes of Farage won’t finance anything!
Ambigirls
Disingenuous tax moves
"The Financial Times suggested that one option would also be to reduce income tax thresholds while keeping tax rates the same, which could raise billions of pounds for the Treasury."
If she does this, it will be a clear reason as to why one should never trust a politician. The Labour manifesto said that they would not increase the rates of income tax so as to protect ‘working people’ – fine, she will not be doing that – but by lowering the income tax thresholds, she would be reaching the same result: more income tax from working people. It would be disingenuous and duplicitous: "We will not stab you from the front (but that does not mean we cannot stab you from the side)."
DaveAni
Spring budget would be better
I can remember a gentler pre-social media and internet era when nobody obsessed about the budget months in advance, and you just waited to find out whether you would be better or worse off on the day.
I think a budget in November is a really bad idea compared to the traditional budget in March because it is already a gloomy time of year, with the nights drawing in and winter approaching. Far better to go back to the spring, when people are feeling a lot more optimistic in general.
CanPeopleReallyBeThisStupid
Wealth redistribution ideas
I’d like to see an increase in the personal allowance, maybe to £30K, then maybe a 25 per cent rate to £100K and after that a 60 per cent rate thereafter, with a wealth tax of 5 per cent on anything over £10M.
That will shake things up and give the least well-off money to spend to grow the economy and recoup some of the obscene and mostly unearned wealth of the richest, who don’t spend and just accumulate more – as we’ve seen – proving that Tory trickle-down doesn’t work, never did, and never will.
rEUjoin
Necessary tax rises
Taxes have to go up in some form or another, and income tax is the easiest and simplest way to do that. The UK is already pretty much maxed out on borrowing, so Reeves can’t borrow her way out of trouble. The only other alternative is spending cuts. Until productivity improves and the economy starts to grow again, those are the only options. MPs need to grasp that and stop playing silly beggars. It may not be what they hoped to do in government, but they have to do what is necessary to govern effectively, not spend their time playing political games.
Tanaquil2
Some of the comments have been edited for this article for brevity and clarity.
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