Rachel Reeves warned Labour faces Lib Dem-style meltdown if she smashes manifesto tax pledges – as revolt mounts over Budget plans

Rachel Reeves is facing a mounting revolt on her Budget plans today amid warnings smashing promises on tax would trigger disaster for Labour.

The Chancellor has been dropping heavy hints that income tax could go up in the package on November 26 – despite the move being explicitly ruled out in the manifesto.

It would be the first increase in the rate since 1975, as Ms Reeves struggles to fill a black hole in the finances estimated at between £20billion and £40billion.

But MPs are increasingly alarmed at the signals coming out of the Treasury – which is due to receive the first costings of draft policies from the OBR watchdog today. 

Former minister Cat West told the BBC’s Westminster Hour that breaking the manifesto could be as catastrophic for Labour as the tuition fees backtrack was for the Lib Dems in 2015. 

Cabinet ministers have also been privately voicing concerns about the fallout should Ms Reeves and Keir Starmer choose the option. 

Labour’s recently-installed deputy leader Lucy Powell insisted last week that it was ‘really important’ to stick to the promises.

Left-wing Labour MPs have been pushing for Ms Reeves to rinse the ‘wealthy’, despite fears that could deal another devastating blow to hopes of getting the economy growing faster.   

Ms West said last night: ‘If I were Rachel, I think I wouldn’t be breaking the manifesto promise.

‘I just think back to the Liberal Democrats and the university fees, because that was, you know, the big one for me that I remember and was very important for me. 

‘That’s how I won my seat, because I won that from the Liberal Democrats. So I think those big ones, they do come back to haunt you.’

Rumours have been swirling about a range of eye-watering ways in which Ms Reeves could seek to raise more revenue.

They include raids on ‘mansions’, pensions and savings.  

In a rare pre-Budget speech last week, Ms Reeves admitted that everyone will have to ‘contribute’ to stabilising the government’s finances.

She insisted ‘we will all have to contribute’ to closing the gap, reeling off a laundry list of factors to blame – including Brexit, the Tories, Covid, the Ukraine war and President Trump’s tariffs.

Cabinet ministers have also been privately voicing concerns about the fallout should Ms Reeves and Keir Starmer choose the option

Such a move would be a blatant breach of Labour’s manifesto pledge to not raise income tax, National Insurance or VAT – and triggered Tory calls for her to be sacked.

But Ms Reeves said she was ‘not going to walk away because the situation is difficult’.

Left-wingers have demanded the Chancellor spares the ‘working class’.