Labour Under Pressure as Income Tax Freeze Extension Appears Increasingly Likely

The Chancellor, Rachel Reeves, is under growing pressure to break Labour’s manifesto pledge not to raise the so-called “big three” taxes—income tax, National Insurance (NI), or VAT—amid mounting fiscal challenges and dwindling financial headroom.

Stephen Millard, acting director at the National Institute of Economic and Social Research, warned that raising one of these taxes is “pretty much inevitable” if the government is to meet its spending commitments.

“Reeves is now under fresh pressure, with her £9.9 billion of fiscal headroom eroded by Donald Trump’s tariffs and her own growth-sapping policies,” Millard said to the Daily Express.

With the government needing to find new revenue streams, the question now is: which tax will be raised?

VAT Unlikely, National Insurance Politically R