Streeting ‘not in favour of breaking manifesto pledges’ as Treasury considers lowering income tax thresholds – UK politics live

A source told the Guardian that plans to break the manifesto pledge on income tax had been ditched by Rachel Reeves

Pippa Crerar, the Guardian’s political editor, says that a combination of better-than-expected fiscal forecasts, and internal opposition – at cabinet level (see 9.59am), not just in the PLP – persuaded Rachel Reeves to drop the plan to raise the basic rate of income tax.

But Reeves may compensate by dragging more people into higher rates of tax, Pippa says.

We’re also hearing that the OBR’s fiscal forecasts are better than expected, as result of stronger wage growth and therefore higher tax receipts.

It means Rachel Reeves doesn’t need to put up basic rate of income tax to fill lower than expected fiscal gap: the politics of that were proving just too hard with disagreement w/in cabinet and anxiety among Labour MPs over manifesto breach.