Rachel Reeves has confirmed she will increase income tax despite manifesto pledge not to

Rachel Reeves has confirmed she will raise income tax in her November 26 Budget. The Chancellor told the Budget watchdog, the Office for Budget Responsibility (OBR), that higher personal taxation is one of the "major measures" in next month's statement, The Times reports.

The OBR is tasked with assessing the impact of the measures and presenting its findings to the Treasury. While the tax hike has been widely predicted, it means Ms Reeves will be breaking a promise made in Labour's General Election manifesto not to increase income tax, National Insurance or VAT.

The Chancellor could increase income tax while cutting National Insurance by the same amount. This would allow her to claim that she has not increased taxes on "working people", because their total tax bill would remain roughly the same; however, pensioners and self-employed individuals, who usually do not pay National Insurance, would pay more.

The Chancellor's decision comes despite demands from some Labour colleagues, including Labour Deputy Leader Lucy Powell, for the Government to keep the promises made in Labour's election manifesto.

Speaking to Matt Chorley on BBC Radio 5 Live, Ms Powell said: "We should be following through on our manifesto, of course. There's no question about that."

She added: "Trust in politics is a key part of that because if we're to take the country with us, then they've got to trust us and that's really important too."

Ms Powell, a former Cabinet Minister who was sacked by Sir Keir in a Cabinet reshuffle, stood for the party's deputy leadership against Education Secretary Bridget Phillipson, who was seen as the preferred choice of the Prime Minister.

Critics say the Chancellor has already broken her election pledge by increasing National Insurance paid by employers in last year's Budget.

Prime Minister Sir Keir Starmer refused to confirm that the pledge still stood when he was questioned in the House of Commons.

Other Budget announcements could include a move towards a pay-per-mile road pricing scheme, as the use of electric cars threatens to reduce petrol taxes, a vital source of income for the Treasury.