Most voters assume highest earners ought to pay extra tax, ballot exhibits

A majority of voters believe the highest-earners should pay more income tax, as Rachel Reeves prepares for the first Labour Budget in 14 years.

According to a new YouGov poll, 58% of people support an increase in the top rate of income tax – impacting people earning over £150,000-a-year. It also showed 56% of people also want to see corporation tax hiked.

The figures came as the Chancellor faced more grim figures on the state of the public finances – leading experts to warn of tax rises at October’s Budget. Ms Reeves was told government borrowing hit £3.1billion last month – almost £2billion higher than a year ago, the highest July since 2021 and far more than forecast by the Office for Budget Responsibility.

The increase was partly due to inflation-linked uplifts to benefits, as well as pay rises for public sector workers. Chief Secretary to the Treasury Darren Jones said the worse-than-expected figures from the Office for National Statistics (ONS) were “yet more proof of the dire inheritance left to us by the previous government”.

He added: “A £22 billion black hole in the public finances this year, a decade of economic stagnation and public debt at its highest level since the 1960s, with taxpayers’ money being wasted on debt interest payments rather than on our public services.”

Experts also said the figures yesterday showed the “challenges” Ms Reeves faces when she unveils the Budget on October 30. Last month the Chancellor blamed the inheritance left by the Tories as she pressed ahead with the controversial decision to scrap universal winter fuel payments for OAPs.

But Ms Reeves has also warned the country faces more “difficult decisions” on spending, welfare and tax. She has ruled out increases to income tax, national insurance and VAT – but has swerved questions on capital gains and inheritance tax.

According to YouGov’s survey just one in seven (15%) of people think increasing tax is the right thing to do. But when asked about specific taxes including corporation tax a majority would support an increase, the poll found.

The New Economics Foundation also said a strong economy “needs investment” and cautioned against further cuts to public services.The left-wing think-tank said: “Borrowing doesn’t have to be scary. It’s responsible for government to borrow for investments which will improve our lives and benefit us all in the long run.”

Rob Wood, chief UK economist at consultants Pantheon Macroeconomics, said: “Rachel Reeves will likely have to raise taxes and borrow more in the medium term to cover spending more on public services.”

Isabel Stockton, senior research economist at the Institute for Fiscal Studies, said: “In just four months – or one-third – of this financial year the Government appears to have spent 34.1% of what was budgeted for the whole year, whereas since comparable data began in 1997 it has never spent more than 32.9% of the eventual total in the first third of the financial year. This is indicative of the scale of the pressures on departmental budgets – in some cases well and above what was budgeted for.”