Income tax rises axed as Reeves caves in to MPs

CHANCELLOR'S BUDGET RETHINK

- BY STEPH SPYRO Deputy Political Editor

RACHEL Reeves has abandoned her plan to raise income tax after bowing to pressure from angry Labour backbenchers.

The Chancellor is instead likely to reduce its thresholds at the Budget later this month, while tax rates could be kept the same.

The move would mean more people drawn in to paying a higher rate. That is expected to raise billions of pounds for the Treasury, as well as quell much of the fury of voters and Labour MPs.

Ms Reeves had been laying the groundwork for tax rises over recent weeks, including during a speech earlier this month aimed at preparing the public for her Budget on November 26.

Downing Street yesterday insisted that the thrust of Ms Reeves' tax-raising speech still holds true.

The Prime Minister's official spokesman said: “She was very clear about the challenges the country faces and her priorities in addressing those challenges. All of that still stands”

He refused to comment on Budget speculation but said the Chancellor will aim to “build more resilient public finances with the headroom to withstand global turbulence’.