Reeves buys time with request for 'everyone to make a contribution'

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4bn by 2030-31. Some Labour MPs privately expressed alarm at the extent to which the budget would hit the so-called “squeezed middle”, including more nurses, teachers and police officers paying higher-rate tax.Almost one in four taxpayers, 24%, will be paying the higher or additional rates in five years’ time as a result of extending the threshold freeze, a process known as “fiscal drag”.

The OBR said the threshold freeze would bring an additional 780,000 people into paying the basic rate of income tax; 920,000 into paying the higher rate; and another 4,000 into the additional rate.

In a series of well-trailed measures, the chancellor targeted the rich via a new council tax surcharge for properties worth more than £2m; and announced a 2p tax increase on income from dividends, savings and property. Contributions to “salary sacrifice” pension schemes, on which employers currently pay no national insurance, will be capped at £2,000 from 2029 - bringing in a significant £4.7bn a year.

Reeves later told journalists she did not believe she had broken the Labour manifesto with the threshold freeze.