As Chancellor Rachel Reeves prepares to deliver her 2025 Budget Statement on Wednesday, Britons are braced for income tax hikes and a higher cost of living.
Pre-budget research from think tank More in Common found that Britons are expecting the worst ahead of the budget, with 71% anticipating that their taxes will rise and 67% expecting to have to cut back on their personal spending as a result of budget measures.
This is despite the fact that after weeks of suggestions that Rachel Reeves would increase the basic rate of income tax in this month’s budget, it is now being reported that the government is no longer considering this option.
57% of those surveyed said they expect that their quality of life will get worse after the budget, and just 17% said they expect the economy will grow.
Most Britons are feeling pessimistic about Reeves’s budget, with pensioners and Reform voters feeling gloomiest about the effect of the upcoming measures.
Trust in the government has eroded over Labour’s potential freezing of tax bands, which almost half of Britons say would be a breach of the party’s promise made in its manifesto to not increase taxes on working people.
This is because freezing tax bands is often described as a ‘stealth tax’ due to fiscal drift, where inflation causing wages to rise while tax bands remain the same leads to people paying a higher proportion of tax on the same effective income.
Opposition to tax rises has increased substantially since the election, although many Britons now believe that wealthy people should pay more in tax. 44% of Britons think that the wealthy do not pay enough in tax, although the electorate is roughly split on whether the risk of capital flight as a result of wealth taxes is serious.
When it comes to individual policies, More in Common also found that there is majority support for a ‘mansion tax’, even amongst Reform and Conservative voters, although those who live in London are generally less supportive of the policy.
Most prefer Sunak to Reeves as Chancellor
Reeves has been the subject of particular skepticism, with confidence in the Chancellor low even amongst those who voted Labour in the last election.
Just over three quarters (76%) of those surveyed by More in Common have little or no confidence in Reeves, and only 51% of Labour voters have a fair amount or great deal of confidence in the Chancellor.
Most Britons believe that Conservatives Rishi Sunak or Jeremy Hunt would do a better job than Rachel Reeves at managing the economy, with even 40% of Labour voters believing that Hunt would perform better than Reeves in the role.
The unpopularity of the current government is evidenced by the fact that 63% of Britons now see Rishi Sunak as a better Prime Minister than Keir Starmer, including the majority of Liberal Democrat voters and a quarter of Labour voters.
Many Britons now believe that Keir Starmer was dishonest during the election, with three in five of those surveyed stating that Rishi Sunak was closer to telling the truth during the election than Starmer was.
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