Rachel Reeves is preparing a budget that aims to raise £40 billion through tax increases and spending cuts amid a £100 billion funding gap looming over public finances.
Labour has ruled out raising income tax, VAT, or national insurance, leading ministers to examine other revenue-generating measures such as raising employers' NICs.
Chancellor Reeves has emphasized that the goal is to prevent real-terms cuts to departments, challenging the notion of returning to austerity under Labour's governance.
Paul Johnson from the Institute for Fiscal Studies claims that raising £40 billion solely through tax increases is extraordinary, suggesting income tax may eventually need to be targeted.
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