After the week No 10 lost control, further chaos could be fatal for Starmer

An income tax 'wobble', the briefing against Streeting ... ministers now veer between despair and anger, write Catherine Neilan and Rachel Sylvester

- Catherine Neilan and Rachel Sylvester

Last Monday, Keir Starmer summoned his closest aides in No 10 to a series of crisis meetings. Two weeks from the budget, the prime minister was having doubts about the proposed key measure - a 2p rise in income tax offset by a similar reduction in national insurance contributions.

There was, said one insider, a serious “wobble” in No 10 about a decision that had, until this point, seemed all but nailed down. Rachel Reeves had spent weeks rolling the pitch but some around Starmer were increasingly nervous about the political implications.

The backlash was growing among Labour MPs - including Lucy Powell, newly elected as the party’s deputy leader - to the idea of breaking a central manifesto pledge.

Having been forced to cave into backbenchers on the winter fuel allowance and welfare reform, Downing Street advisers were worried Starmer did not have the political authority to force through the first rise in the basic rate of income tax for 50 years.

Morgan McSweeney, the prime minister’s chief of staff, was among those who feared the mood was so hostile that a leadership challenge could follow the 26 November budget. “The PLP [Parliamentary Labour party is in a very dangerous place,” a senior figure said. “The truth is, the majority is too big. People don’t think it matters if they rebel.”

When the Office for Budget Responsibility delivered its updated forecasts, suggesting the chancellor may only need to find £20bn rather than £30bn, it became easier to abandon the planned income tax increase and go for a “smorgasbord” of tax-raising measures instead.