Rachel Reeves ditches plans to hike income tax as UK borrowing costs jump

Comments

View Image

Rachel Reeves has abandoned plans to break Labour’s manifesto pledge and raise income tax at this month’s Budget. ‌

The Chancellor had been expected to hike income tax in the face of a yawning gap in her spending plans, hinting as recently as Monday that the alternative would be “deep cuts” to public investment. ‌

Incomes tax levels in Scotland are set by Holyrood but spending decisions set by Reeves have a major impact on how much funding is available to the SNP Government. ‌

A 2p rise in the basic rate in England could have slashed £1 billion from Holyrood's annual block gtrant.

But the Financial Times has reported that Reeves has now abandoned those plans over fears they could anger both voters and backbench Labour MPs.

The decision was communicated to t