Chancellor dumps plan to increase income tax

CHANCELLOR Rachel Reeves has abandoned plans for a manifesto-busting hike to income tax rates in the Budget.

- BY LIZZY BUCHAN Political Editor and GRAHAM HISCOTT Head of Business

Treasury insiders said better than expected economic forecasts had reduced the size of the black hole in the public finances.

Ms Reeves, pictured below, had been signalling income tax rises loomed on November 26 and hinted on Monday the alternative was spending cuts.

The move would have shredded Labour's vow to protect working people from increases to VAT, National Insurance and income tax.