The Institute for Fiscal Studies (IFS) has delivered a damning verdict on Chancellor Rachel Reeves's first Budget, accusing her of breaking a key Labour manifesto promise not to raise taxes on working people.
Unprecedented Tax Burden
According to the independent Office for Budget Responsibility (OBR), the measures announced will push the UK's overall tax burden to an all-time high. The Budget includes £26 billion in tax increases, a figure that has drawn widespread criticism from economic experts and political opponents alike.
Among the most significant measures are freezes to income tax thresholds, which are expected to drag 1.7 million more people into paying higher rates of tax as their wages increase with inflation. The IFS specifically highlighted that these threshold freezes, combined with a cap on pension salary sacrifice schemes, would effectively increase National Insurance contributions for many workers.
Manifesto Promise Under Scrutiny
During the response to her Budget statement, Rachel Reeves acknowledged that working people would need to 'contribute a bit more' but stopped short of admitting that the measures represented a breach of Labour's election promise. The manifesto had explicitly committed to not raising taxes on working people.
The IFS analysis directly contradicts the Chancellor's position, stating clearly that the combination of fiscal measures constitutes a breach of that pledge. The independent economic research institute is widely respected for its impartial analysis of public finances.
Political and Economic Fallout
The revelation has sparked significant political controversy, with opposition parties seizing on the IFS assessment to criticise the new government's economic approach. The timing of the Budget, delivered on Thursday 27 November 2025, means the government faces considerable scrutiny over its first major economic statement.
With the tax burden set to reach record levels and millions of workers facing higher deductions from their pay packets, the Chancellor faces mounting pressure to justify how these measures align with her party's election promises. The situation presents an early challenge for the Labour government's economic credibility.
