Ministers' warning on income tax move

CABINET ministers have warned Rachel Reeves against breaking her pledge not to raise income tax as she scrambles to find billions ahead of the Budget.

- By Christian Calgie

The Treasury is reportedly in active discussions about adding 1p in the pound to the basic rate, which would raise around £8billion while costing workers up to £377 a year.

Ms Reeves is eyeing the move as she attempts to find around £30billion in tax hikes to fill her latest fiscal black hole, according to reports.

While Labour's election manifesto provided a cast-iron guarantee not to raise income tax, National Insurance or VAT, a Treasury source said: “There is a very live debate going on right now among those planning the Budget about how bold we want to be.”