Labour accused of 'softening' UK up for 'another brutal Budget' as borrowing costs hit 18-year high

From the Newshound archive · first published 19 September 2026.

SNP Westminster leader Dave Doogan has accused Labour of deliberately priming the public to accept a "Westminster budget of cuts and tax rises" before Chancellor John Healey's first Budget on 28 October. Doogan argues the government is "softening" Britain up for sweeping tax rises despite manifesto pledges to the contrary. Yields on ten-year government debt have risen to 5.25 per cent — a level not seen since the 2008 financial crisis — cutting an estimated £10 billion from Treasury headroom.

Capital Economics warns that surging borrowing costs have effectively left Labour with no choice but to raise taxes, whatever its manifesto said.

Income tax thresholds frozen until 2031 mean every inflation-matching pay rise pulls workers into higher bands — a stealth measure worth roughly £25 billion a year to the Treasury.

Around three million more people are expected to be paying the 40p higher rate by 2029, even if Labour never formally raises income tax rates.