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Rachel Reeves is being accused of preparing to break one of Labour’s key election promises — but the truth is that if she raises Income Tax, she might actually be doing the right thing for once.
The BBC is reporting that the Chancellor has refused to rule out a rise in Income Tax in next month’s Budget, following claims that the Treasury is in “active discussions” about adding a penny to the basic rate.
Labour’s 2024 manifesto pledged not to raise “the basic, higher, or additional rates of income tax” — but Reeves is now under pressure. The Institute for Fiscal Studies says there’s a £22 billion “black hol” in the government’s finances, and there’s almost no room left within her own fiscal rules to borrow or spend more.
Predictably, the media reaction has been loud and shallow: cries of “broken promises” and “tax bombshell” before anyone has even heard the detail.
But step back a little, and a different story appears — one that challenges the idea that lower taxes always mean better lives.
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You see, many of us remember when the basic rate of Income Tax wasn’t 20 per cent. It was 25 per cent — and, frankly, life was better then.
That isn’t nostalgia. It’s reality.
When ordinary working people contributed a little more through tax, we had public services that worked.
The NHS wasn’t gasping for breath.
Local councils could afford to keep parks, libraries and leisure centres open.
Teachers weren’t having to buy classroom supplies from their own pockets.
It wasn’t that we were paying more and getting less — we were paying a fair share and getting value for money.
It’s only since the so-called “low tax revolution” of the past 40 years that life for the average person has become harder, meaner and more precarious.
Taxes have been cut — but wages have stagnated, costs have risen, and public infrastructure has been allowed to rot.
The rich have done very nicely out of that shift.
They can buy private healthcare, private schooling, private security, private everything.
The rest of us have been left with crumbling public services and rising personal bills for things that used to be shared.
That’s what a low-tax economy really means: not more freedom, but more individual risk. Not prosperity, but insecurity.
When Reeves says she wants “those with the broadest shoulders to pay their fair share”, she’s right in principle — but she should also be brave enough to say that rebuilding a broken society takes contribution from everyone.
A one-penny rise in the basic rate of Income Tax would bring in around £8 billion a year — enough to start repairing the damage done by years of austerity and short-term thinking.
That’s not a burden. It’s an investment.
The real betrayal wouldn’t be raising Income Tax. It would be pretending that we can rebuild the United Kingdom on cheap slogans and threadbare budgets.
Reeves has spent months insisting that her fiscal rules must be met — that debt must fall as a share of national income, and day-to-day spending must be paid for by tax revenue rather than borrowing.
If she truly believes in that discipline, then she must also accept its consequence: taxes have to rise somewhere.
The fair, honest approach would be to say so openly — and if she won’t raise a wealth tax as so many of us have pleaded, then it would be better to explain that raising Income Tax, carefully and progressively, can restore what decades of underfunding have taken away.
The UK didn’t fall apart when the basic rate was 25 per cent.
In fact, it thrived.
People could afford homes.
Wages went further.
Communities had life in them.
And all of that depended on a social contract that everyone contributed to.
So instead of panicking about a headline number, perhaps it’s time to remember what those taxes bought us — and to ask whether we can really afford not to pay a little more now.
If Reeves is serious about fixing the country’s finances and rebuilding the public realm, then a modest rise in Income Tax isn’t a betrayal of her promises.
It’s a step towards keeping them.
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We did better when Income Tax was higher – and it’s time we remembered that
Share this post:
Rachel Reeves is being accused of preparing to break one of Labour’s key election promises — but the truth is that if she raises Income Tax, she might actually be doing the right thing for once.
The BBC is reporting that the Chancellor has refused to rule out a rise in Income Tax in next month’s Budget, following claims that the Treasury is in “active discussions” about adding a penny to the basic rate.
Labour’s 2024 manifesto pledged not to raise “the basic, higher, or additional rates of income tax” — but Reeves is now under pressure. The Institute for Fiscal Studies says there’s a £22 billion “black hol” in the government’s finances, and there’s almost no room left within her own fiscal rules to borrow or spend more.
Predictably, the media reaction has been loud and shallow: cries of “broken promises” and “tax bombshell” before anyone has even heard the detail.
But step back a little, and a different story appears — one that challenges the idea that lower taxes always mean better lives.
You see, many of us remember when the basic rate of Income Tax wasn’t 20 per cent. It was 25 per cent — and, frankly, life was better then.
That isn’t nostalgia. It’s reality.
When ordinary working people contributed a little more through tax, we had public services that worked.
The NHS wasn’t gasping for breath.
Local councils could afford to keep parks, libraries and leisure centres open.
Teachers weren’t having to buy classroom supplies from their own pockets.
It wasn’t that we were paying more and getting less — we were paying a fair share and getting value for money.
It’s only since the so-called “low tax revolution” of the past 40 years that life for the average person has become harder, meaner and more precarious.
Taxes have been cut — but wages have stagnated, costs have risen, and public infrastructure has been allowed to rot.
The rich have done very nicely out of that shift.
They can buy private healthcare, private schooling, private security, private everything.
The rest of us have been left with crumbling public services and rising personal bills for things that used to be shared.
That’s what a low-tax economy really means: not more freedom, but more individual risk. Not prosperity, but insecurity.
When Reeves says she wants “those with the broadest shoulders to pay their fair share”, she’s right in principle — but she should also be brave enough to say that rebuilding a broken society takes contribution from everyone.
A one-penny rise in the basic rate of Income Tax would bring in around £8 billion a year — enough to start repairing the damage done by years of austerity and short-term thinking.
That’s not a burden. It’s an investment.
The real betrayal wouldn’t be raising Income Tax. It would be pretending that we can rebuild the United Kingdom on cheap slogans and threadbare budgets.
Reeves has spent months insisting that her fiscal rules must be met — that debt must fall as a share of national income, and day-to-day spending must be paid for by tax revenue rather than borrowing.
If she truly believes in that discipline, then she must also accept its consequence: taxes have to rise somewhere.
The fair, honest approach would be to say so openly — and if she won’t raise a wealth tax as so many of us have pleaded, then it would be better to explain that raising Income Tax, carefully and progressively, can restore what decades of underfunding have taken away.
The UK didn’t fall apart when the basic rate was 25 per cent.
In fact, it thrived.
People could afford homes.
Wages went further.
Communities had life in them.
And all of that depended on a social contract that everyone contributed to.
So instead of panicking about a headline number, perhaps it’s time to remember what those taxes bought us — and to ask whether we can really afford not to pay a little more now.
If Reeves is serious about fixing the country’s finances and rebuilding the public realm, then a modest rise in Income Tax isn’t a betrayal of her promises.
It’s a step towards keeping them.
Support Vox Political!
With social media algorithms acting as gatekeepers – allowing users to read only what their owners want them to, sites like Vox Political need the support of our readers like never before.
You can help by making a donation:
https://Ko-fi.com/voxpolitical
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