Reeves to lay groundwork for tax rises in ‘candid’ speech about budget

The chancellor has been urged by an influential thinktank to raise income tax by 2p and cut national insurance by the same amount. Photograph: Victoria Jones/Shutterstock

Rachel Reeves will lay the groundwork for a tax-raising budget that could break Labour’s election promise on income tax, in a major speech in which she will be “candid” about the tough choices ahead.

The chancellor will give the speech as the markets open on Tuesday, when she will promise to make fair choices at this month’s budget but decline to repeat her manifesto pledge of no rise in income tax, VAT or national insurance.