The chaos of Brexit and years of austerity are to blame for the tax rises Rachel Reeves is expected to announce at the Budget, a Cabinet minister said.<\/p>\n
Education Secretary Bridget Phillipson insisted the Government takes its manifesto commitments seriously despite expectations at Westminster that the Chancellor will rip up the promises made to voters over tax hikes.<\/p>\n
The National Institute of Economic and Social Research, a major economic think tank, said the Chancellor must plug a \u00a350 billion black hole in the nation\u2019s public finances and give herself a larger fiscal headroom.<\/p>\n
It suggested a 2p rise in income tax was likely to be needed to address the hole, echoing a similar suggestion by the Resolution Foundation, another think tank which has been influential upon the Government\u2019s thinking.<\/p>\n
Ms Reeves would become the first chancellor in half a century to increase the basic rate of income tax if she follows that suggestion when she delivers her November 26 Budget.<\/p>\n
Speculation that she will take that step, which would mean ditching Labour\u2019s manifesto commitment not to increase income tax, national insurance or VAT, was heightened when she delivered a speech on Tuesday saying that \u201ceach of us must do our bit\u201d.<\/p>\n
An expected downgrade in forecasts of productivity from the Office for Budget Responsibility (OBR) will add to Ms Reeves\u2019 headaches because it will suggest lower economic growth and tax receipts.<\/p>\n
\n\u26a1\ufe0fNEW ANALYSIS OUT NOW \u26a1\ufe0f<\/p>\n
Raising the rate of #incometax<\/a> would be the least economically damaging option available to the #Chancellor<\/a> at this time<\/p>\n
Read more here \u2b07\ufe0f#Budget2025<\/a> #ukeconomy<\/a> #FiscalPolicy<\/a> https:\/\/t.co\/dCDVU9GTZH<\/a><\/p>\n