The Tension Between Promises and Reality
Chancellor Rachel Reeves is set to face criticism for yet another tax-raising Budget, despite previous assurances that working people would not be targeted. As she prepares to address the Commons, many are questioning whether her actions align with her promises made over the past year.
Freezing Income Tax Thresholds: A Controversial Move
Ms. Reeves is expected to freeze income tax thresholds, a decision that has been widely criticized as a "stealth tax" on those earning above the threshold. This move could affect nearly one million more individuals due to wage inflation, effectively increasing their tax burden. The personal tax allowance and higher rate threshold will remain unchanged, leading to more people paying additional taxes.
This decision comes after Ms. Reeves and the Prime Minister previously assured the public that working people would not face punishment this time around, especially after a 2024 Budget that increased taxes by £40 billion. Even her former deputy, Darren Jones, acknowledged that freezing the personal allowance at £12,570 was practically a tax rise.
Breaking Promises: A Point of Contention
Experts argue that continuing the freeze represents a betrayal of past promises not to increase taxes on working people. This includes the 2024 election manifesto that helped Labour gain power. Despite these concerns, Ms. Reeves has consistently vowed not to raise personal taxes in the past year since the last Budget.
Commitments and Challenges
On October 30, 2024, Ms. Reeves addressed the issues with freezing the income tax thresholds, stating, "I have come to the conclusion that extending the threshold freeze would hurt working people. It would take more money out of their payslips." She emphasized that she is keeping every single promise on tax that she made in her manifesto.
She added, "When it comes to choices on tax, this government chooses to protect working people every single time."
On October 31, she told Times Radio, "This Budget was to wipe the slate clean after the mismanagement and the cover-up of the previous government." She noted that big choices were necessary to stabilize public finances and services.
Navigating Economic Uncertainty
By November 25, Ms. Reeves stated, "We've put our public finances back on a firm footing, and we've now set the budgets for public services for the duration of this Parliament." She emphasized that public services must live within their means, and she would not return with more borrowing or taxes.
On December 3, she told the House of Commons, "We had to raise taxes to fund our public services; but never again will we have to repeat a Budget like that one, because we have now wiped the slate clean and drawn a line under the mess created by the previous Government."
However, 2025 brought a series of U-turns from the Chancellor, raising questions about her commitment to previous fiscal vows.
Looking Ahead
On June 12, 2025, Ms. Reeves told the BBC, "No chancellor is able to write another four years of Budgets within a first year of government, you know how much uncertainty there is in the world at the moment." She emphasized that the key focus of the Budget would be to boost productivity and growth.
Later that day, she spoke at the Great Northern Conference in Hull, stating that public services would have to "live within their means" and that she would not return with more tax rises or higher borrowing.
The Future of Tax Policy
As the upcoming Budget approaches, many are asking whether Ms. Reeves will break her no-tax-increase promise amid fears of record-high burdens. Will she make bold tax moves to steer Britain away from austerity? Or will chaos reign as she unveils her feared Budget with tax hikes galore?
The coming weeks will be crucial in determining whether the Chancellor can balance her commitments with the economic challenges ahead.
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