Politics Weekly UK The chancellor’s impossible choice: economic necessity or political disaster?
Nov 6, 2025
Heather Stewart, the Guardian's economics editor, and Sunder Katwala, director of British Future, dive into pressing issues like the potential rise in income tax and its political fallout. Stewart explains the historic implications of tax changes, assessing political risks while suggesting compensatory measures. Katwala discusses the normalization of racist rhetoric in politics, linking online visibility of minorities to a rise in overt racism. Together, they explore how these dynamics are reshaping the UK's political landscape.
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Historic Tax Rise, High Political Risk
- Raising the basic rate of income tax would be historically significant and politically risky for Labour.
- Heather Stewart says it would directly show up on payslips and break a clear manifesto promise, making it hard to sell.
Chancellor's Tight Fiscal Choices
- Rachel Reeves faces a constrained choice: cuts, tax rises, or abandoning fiscal rules to borrow more.
- Stewart emphasises weak growth, skittish bond markets, and the challenge of selling tax changes politically.
Longstanding Economic Underperformance
- The UK's weak growth and productivity shortfall predate Labour and have persisted since the financial crisis.
- Stewart argues the problem is long-term and slow to fix, not a sudden collapse requiring immediate dramatic action.