Voters fear Reeves tax U-turn after Spending Review splash out
UK voters are worried Chancellor Rachel Reeves will betray Labour manifesto pledges not to hike income tax, a new poll has suggested, as the government looks set to ramp up investment at Wednesday’s spending review.
Sir Keir Starmer has declared that the government cannot “tax [its] way to growth” while ministers have said the spending review will show austerity has not returned under Labour.
But Brits fear they may be let down as more than half of UK voters polled by Freshwater Strategy for Morning Wire expect the government to raise income tax while two in five respondents said they anticipated a hike to VAT.
The poll of around 1,250 voters suggested the majority of voters would prefer the government to cut taxes and spending even if it meant public services would receive less cash.
Reeves will unveil the government’s spending commitments between 2026 and 2029 on 11 June, with an £86bn package earmarked for science and technology despite financial pressures on the public purse.
The Treasury also revealed a U-turn on winter fuel payments will cost £1.25bn, squeezing Reeves’ small headroom.
Asked in an interview with GB News whether she would rule out tax rises, Reeves said:
“We will set out all of the policies in the budget that is normal. But we wanted to announce today the level at which the winter fuel payment will be paid because announcing it now means that we can put the processes in place.”
Further spending commitments may signal that the government will raise taxes in the autumn in order to meet strict fiscal rules set by Reeves, according to leading City analysts and think tanks.
Potential tax hikes
The Institute for Fiscal Studies’ Paul Johnson has suggested that the government could extend a freeze on income tax thresholds for a longer period than Reeves announced at the last Autumn Budget, which is deemed as a “stealth tax” that could hit millions more Brits.
Oxford Economics have predicted that the government will have to raise taxes to cover debt service costs, which could rise by some £10bn by the end of the decade.
Deputy Prime Minister Angela Rayner, meanwhile, has reportedly suggested raising taxes on the wealthy and on investors in order for borrowing to be curbed.
Around one in three voters said they preferred the government to increase taxes in order to allow the government to spend more.
Defence is also likely to feature heavily in the upcoming Spending Review as Reeves is expected to lay out plans on how resources will be directed to improving the UK’s military capabilities by 2027.
More than half of voters back Starmer’s “ambition” to increase spending on defence to three per cent of UK GDP by the next parliament, with most wishing ministers in other departments would accept spending cuts to fund investment on the armed forces and other equipment.
Nato could yet demand the government to increase spending on defence by more than Starmer has promised, prompting a potential clash between the UK government and the Trump administration.
A touted reversal to the two-child benefit cap, reportedly supported by Starmer and leftwing members of the Labour Party, would be opposed by most Britons, according to Freshwater Strategies’ poll of 1,250 voters.
The poll also showed that people on the lowest income are least likely to support removing the cap while people earning above £60,000 were more likely to support the policy U-turn.
Method note: Freshwater Strategy interviewed n=1,250 eligible voters in the UK, aged 18+ online, between 6-8 June 2025. Margin of Error +/- 2.8%. Data are weighted to be representative of UK voters.