In a dramatic break from their election promises, Chancellor Rachel Reeves has unveiled a Budget that imposes an additional £26 billion in tax rises, directly contradicting repeated assurances made to voters by the Labour leadership.
The Broken Pledges
Throughout the election campaign and into government, both the Prime Minister and the Chancellor vowed they would not increase taxes on working people. They insisted their manifesto was fully costed and, with the tax burden already at a 70-year high, they were not in the business of raising more revenue.
On Wednesday, the 26th of November 2025, those pledges were shattered. The Chancellor's statement detailed the £26 billion tax increase, which comes on top of a £40 billion rise announced in her first budget.
One of the most significant reversals was on the freezing of income tax thresholds. Just a year ago, Reeves explicitly promised not to extend this Conservative policy, arguing it would "hurt working people." In this Budget, she has extended the freeze for three years, a move that will drag 800,000 workers into paying tax and another one million into the higher rate band, raising £8.3 billion.
A Budget for Self-Preservation?
The Chancellor defended her plans as a "Labour budget," and the figures support her claim. Within the first 17 months of this government, Labour has raised tens of billions in taxes while simultaneously performing expensive U-turns on welfare reform.
Reversals on the winter fuel allowance and disability benefits have cost £6.6 billion. Furthermore, Ms Reeves lifted the two-child benefit cap at a cost of £3 billion, despite the Prime Minister previously omitting this pledge from the manifesto to demonstrate fiscal discipline.
The Office for Budget Responsibility (OBR) now predicts that by the end of this parliament, one in four people will be paying the higher 40% rate of income tax.
The Political Calculus and Credibility Question
These substantial tax rises were designed to address two key audiences: the financial markets and the Labour Party itself.
For the markets, the increased revenue helps the Chancellor meet her fiscal rules, which mandate a surplus on day-to-day spending by 2029-30. Her fiscal headroom has now been bolstered from a precarious £9.9 billion to £22 billion, a buffer intended to reassure investors and potentially lower the nation's borrowing costs.
For her party, the Budget served to placate mutinous backbenchers. The decisions to duck deeper welfare reform and lift the two-child benefit cap appear to be concessions to a restless parliamentary party. As one cabinet minister privately remarked, "This is a budget for self-preservation, not for the country."
Despite commanding a massive majority of 400 MPs, the government finds itself leading from a "defensive crouch," focused more on survival than on implementing a bold, transformative agenda.
When challenged on the broken manifesto promises, the Chancellor argued that her pledge specifically referred to the rates of income tax, not thresholds—a technicality the Institute for Fiscal Studies has disputed. This attempt to sidestep, rather than honestly explain the difficult decisions, speaks volumes about the administration's current mindset.
The fundamental question of accountability remains. Voters, particularly the middle and higher earners who form a core part of Labour's base, were explicitly told during the election that taxes would not rise. The Prime Minister promised to fund public services through growth and had "no plans" for tax increases on working people.
With this Budget, those people have been let down. The tax rises are largely back-loaded, creating a "spend-now-pay-later" model where the largest financial pain for voters is scheduled for the year before the next election.
While this Budget may buy the Prime Minister and his Chancellor precious time to stabilise their leadership, the long-term cost could be far greater. For an administration that promised to change the country, many will look at these tax rises and see the same old Labour.
