SPLITS have reportedly emerged at the top of Labour over the party breaking its manifesto promises on tax hikes.

Labour’s new deputy leader Lucy Powell said yesterday the government “should be following through” on its manifesto pledge not to raise income tax, National Insurance or VAT, amid mounting speculation Chancellor Rachel Reeves is preparing to do so in the November 26 Budget.

Ms Powell said breaking that promise would risk undermining “trust in politics” and urged ministers to prioritise “putting more money back into the pockets of ordinary working people.” 

Speaking to BBC Radio 5 Live, she added: “It’s really important we stand by the promises that we were elected on and do what we said we would do.”

Her comments come after Ms Reeves’s speech earlier this week fuelled expectations of tax increases. 

According to The Times newspaper, the Office for Budget Responsibility (OBR) has been told to assess the impact of a potential income tax rise, with its findings due to be shared with the Treasury on Monday.

The National Institute of Economic and Social Research (NIESR) has estimated the Chancellor will miss her self-imposed debt-reduction target by over £40 billion, which Ms Reeves could seek to avoid through a 2p rise in the basic rate of income tax.

A spokesperson for Ms Powell later said she would continue to support the Chancellor.

“As the Chancellor said this week, the context for this Budget is particularly difficult,” they said.

Ms Powell was sacked from Sir Keir’s Cabinet in September before winning the race to succeed Angela Rayner as deputy party leader last month, based on a campaign call for the party to change course.