""There's a political risk that No 10 are increasingly worried about, that we're dying a slow death by the manifesto pledges, and the budget will look like a hodgepodge.""
""Labour's manifesto before returning to power last year included a promise not to raise national insurance, VAT or income tax, which between them account for about 75% of tax revenue.""
""We are talking to the OBR about growth measures. There's a lot of work going on with that, said a Treasury source.""
A significant internal tension exists within Labour over maintaining manifesto pledges against a worsening fiscal outlook. The manifesto pledged not to raise national insurance, VAT or income tax, which together provide about 75% of tax revenue. The OBR presented a markedly more pessimistic growth forecast, and the first projection of tax and spend is expected to leave a £20bn–£40bn gap against the £10bn headroom set in spring after higher borrowing costs and policy U-turns. Rachel Reeves remains committed to the pledges. The Treasury is seeking to persuade the OBR to factor in pro-growth policy effects, while some colleagues urge abandoning pledges to avoid many small measures.
Read at www.theguardian.com
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