Has Rachel Reeves broken her manifesto promises with the budget?

"Rachel Reeves told MPs in the Commons on Wednesday: I have cut the cost of living with money off bills and prices frozen all while keeping every single one of our manifesto commitments. The claim was a bold one, given that the chancellor had promised not to raise national insurance, VAT or income tax, and has arguably raised two of them."

"That move is predicted to raise an additional 25bn a year to the government coffers by 2028/29. The chancellor had been considering raising income tax rates, which would have been a straightforward and undeniable breach of manifesto commitments. She even argued two weeks before the budget: It would, of course, be possible to stick with the manifesto commitments, but that would require things like deep cuts in capital spending."

"In the end, she junked that plan and chose instead to freeze tax thresholds for three more years than previously planned. This means that, as wages rise, more people will have to start paying income tax including some people whose only income is the state pension. The Office for Budget Responsibility says the move will raise 8bn a year by 2029/30."

Cost-of-living relief included reductions on bills and price freezes alongside the retention of manifesto commitments. Public spending increased at the last budget and was funded by about £40bn of tax rises, the largest being a 1.2p rise in employers' national insurance contributions, forecast to raise £25bn annually by 2028/29. Consideration of income tax rate increases was set aside in favour of extending tax threshold freezes for three additional years, creating fiscal drag. The threshold freeze is projected to raise £8bn a year by 2029/30 and will bring more people, including some state pensioners, into income tax. The move drew criticism for breaking non-increase promises on working people’s taxes.

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