Rachel Reeves LIVE: Chancellor facing MPs for first time since ‘Benefits Street’ Budget | Politics | News

Rachel Reeves has been criticized for breaking Labor’s campaign promise not to increase taxes on working people by extending the freeze on income tax thresholds in her second Budget.

Freezing the thresholds would result in 780,000 more basic rate, 920,000 higher rate and 4,000 more additional rate income taxpayers in 2029/30 as earnings rise over time. Scotland has a separate income tax system.

People have to pay 20% income tax if their earnings go above £12,570; The 40% band starts at £50,271 and the 45% band starts at £125,140.

Influential economic think tank the Institute for Fiscal Studies (IFS) said the freeze “clearly represents a tax on working people”.

Defending the plans, Ms Reeves told Sky News: “I know it will mean working people pay a bit more. But I’ve kept that contribution to an absolute minimum by closing a number of tax loopholes and also reducing government spending, waste and inefficiency.”