Starmer and Reeves ditch plans to raise income tax

They have ditched plans to break their manifesto pledge

They have ditched plans to break their manifesto pledge and raise income tax rates in a major U-turn less than two weeks from the budget.

This decision, which was first brought to light in the Financial Times, follows a turbulent few days which has brought a change of heart in Downing Street.

The conclusion is a complete U-turn: only last week, the chancellor appeared to be setting the stage for manifesto-breaking tax rises in the budget.

The decision to drop the plans was communicated to the Office for Budget Responsibility on Wednesday in an agreement of "major measures", as reported by the Financial Times.

Now, the chancellor will have to fill an estimated £30bn black hole with various narrower tax-raising measures as well as freezing income tax thresholds for another two years beyond 2028, which is believed to raise about £8bn.

Conservative leader Kemi Badenoch said: "Only the Conservatives have fought Labour off their tax-raising plans.

"But one retreat doesn't fix a budget built on broken promises. Reeves must guarantee no new taxes on work, businesses, homes, or pensions - and she should go further by abolishing stamp duty."

The change of plan comes after Starmer found himself immersed in a leadership crisis after his allies warned rivals that he would fight any attempted coup after the Budget announcement.