The Office for Budget Responsibility (OBR), the Treasury's independent fiscal watchdog, has warned that nearly 50 million Britons — including minimum wage workers — could be dragged into the 40 per cent higher rate of income tax unless the Government brings public spending under control. The alert, contained in the OBR's assessment of long-term "fiscal risks", matters because it highlights the mounting pressure on Labour to either curb spending or raise taxes to keep the public finances sustainable.

The report identified "challenging" spending pressures, driven largely by demographic change, in areas such as health and social care, state pensions, defence and Net Zero. It projected that primary government spending could rise from 40 per cent of GDP in 2030-2031 to 49 per cent by 2075-2076, pushing public sector debt to three times the size of the economy. The OBR cautioned that if the UK were hit by economic shocks similar to those of recent years, debt could "very quickly become unsustainable" and potentially exceed 1,000 per cent of GDP, adding that relying on tax rises to close the gap would bring "increasing risks and worsening trade-offs".