Labour Tax Promises Under Fire After Budget Reveals Massive Rise

Chancellor Rachel Reeves has introduced nearly £60 billion in tax rises beyond what Labour had pledged in its manifesto, according to new budget figures. The government’s pre-election assurances outlined £8.6 billion in tax increases, claiming that every policy was “fully costed and fully funded.” However, since taking office, Reeves has delivered £68 billion in new tax measures, substantially exceeding the initial commitment.

The latest budget includes £26.6 billion in additional taxes, affecting both workers’ incomes and pension savings. This follows a previous year’s £41.2 billion hike, driven primarily by a £25 billion rise in National Insurance Contributions levied on employers. Altogether, Labour’s tax increases by 2030 to 2031 are set to be almost eight times the amount outlined in the party’s election plans.

The 2024 Labour manifesto detailed just a few specific tax rises: £1.2 billion from a windfall tax on energy companies; £1.5 billion from VAT on private school fees; and £5.2 billion from closing non-dom tax loopholes and reducing avoidance. Yet, simply extending the freeze on income tax thresholds will yield £12.4 billion, outstripping the manifesto’s full list of pre-election policies.

Reeves has argued that this freeze does not breach the letter of Labour’s promises, though she has admitted it means ordinary citizens will pay more. Labour’s leadership maintains the manifesto honoured its commitment not to raise the main rates of National Insurance, income tax, or VAT for workers. However, significant changes to pension contribution taxation and the limits on salary sacrifice arrangements are expected to bring in £2.6 billion a year, partially undermining pledges to boost saving and investment.

A key point of contention has been the rise in employer National Insurance Contributions. Labour’s position is that its promise only concerned the smaller portion of this tax paid directly by employees. Business leaders disagree, noting a negative impact on confidence and hiring as a result of increased employment costs.

Public opinion reflects scepticism. A YouGov poll of over 4600 individuals indicates only 16 percent believe the Chancellor has kept to her party’s key tax promises, while 57 percent say she has not. Among Labour supporters, just a quarter think the government’s word has been kept on taxation.

Labour’s new tax regime has prompted strong criticism from across the political spectrum. Former Chancellor Philip Hammond pointed out the difficulty in reconciling the manifesto with the practical outcomes, while the shadow business secretary accused the government of failing basic arithmetic. The marked increase in tax burden signals a clear divergence from Labour’s pre-election assurances, intensifying the debate over fiscal credibility and voter trust.