Leadership and broken promises: Reeves’ Autumn Budget dilemma

As Rachel Reeves prepares to deliver the Autumn Budget on 26 November, Westminster is braced for a political storm. The Chancellor has dithered and dallied on whether she will break its manifesto pledge not to raise income tax, a promise that helped secure its landslide victory just over a year ago.

Some reports have suggested that Reeves is considering a 2p rise in income tax, offset by a cut in National Insurance for lower earners, to plug a fiscal gap that could reach £30 billion. This would be a bold and controversial move as Labour campaigned on protecting 'working people' from tax hikes. Then again, reports have also said she won’t touch income tax. Whether the pledge is broken or not, is it ever okay for leaders to break their promises?

For ordinary citizens, a broken promise feels personal. However, if people believe a U-turn is necessary and fair, they often forgive. But that forgiveness isn’t automatic, it must be earned. Reeves faces sluggish growth, rising borrowing costs, and global uncertainty. She’s in a difficult position: sticking rigidly to the manifesto could mean slashing investment in infrastructure and skills, undermining Britain’s future. In that light, breaking a promise wouldn’t be a failure of leadership; it would be an act of responsibility, if done openly and fairly.

Reeves herself framed the dilemma starkly: “If you’re asking what comes first, the national interest or political expediency, it’s the national interest every single time for me – and it’s the same for Keir Starmer too." She knew the optics were bad, but she was betting that voters would respect honesty and realism over rigid adherence to a pledge that no longer fits the economic reality. It seems now she may have misjudged the capacity for forgiveness amongst the public (and her own back benchers).

At the same time, Reeves argues that without extra revenue, Britain faces “deep cuts” to investment which could choke productivity and growth for years to come. “It would, of course, be possible to stick with the manifesto commitments, but that would require things like deep cuts in capital spending”, she told BBC Radio 5 Live. “And the reason why our productivity and our growth has been so poor these last few years is because governments have always taken the easy option to cut investment."

The choice isn’t between good and bad, it’s between two difficult paths.

How to break a promise well

From a leadership perspective – it would be better in the Budget if Reeves did stick to her original decision to raise the tax and break a promise, because if you must break a promise, you must do it well.

Leadership research points to three essentials: be transparent, explain why, and share the burden fairly. Until recent briefings of a U-Turn, Reeves seemed to be following that script. Reeves’ message to the public was this: “Each of us must do our bit for the security of our country and the brightness of its future”. It frames her decision as realism, not opportunism. Pairing an income tax rise with a National Insurance cut for lower earners also signalled an attempt at fairness. From a leadership perspective, Reeves had softened the ground, though reports of a U-turn have now undone all her work.

She had been upfront about the fiscal challenge, used clear language, and positioned the move as a trade-off for stability and growth. That’s smart politics. But let’s be honest: even the best communication can’t erase the sting of a broken pledge. Voters may accept the logic and still feel let down. Polling suggests only one in five voters approve of breaking the manifesto promise, even if they acknowledge it’s in the national interest.

Trust: trading short-term kindness for long-term competency

This can also be viewed through a trust model lens. Research shows that trust can be broken in three different ways: perceived lack of ability or competence, benevolence, and integrity or character. This is known in research as the CBI (competence, benevolence and integrity) or the ABI (ability, benevolence and integrity) model of trust. Trust is broken when people perceive the leader to be lacking in one or more of these categories.

Reeves seems to be at a crossroads: if she breaks the manifesto promise now, she risks being seen as dishonest and unkind. She could, however, secure a future reputation as competent if her plans for investment, economic growth and job creation are realised. However, if that future growth does not reach ordinary citizens, people will also lose faith in her competence and feel that have been let down twice.

Reeves needs to convince citizens that she is not dishonest, but that circumstances have changed. She needs to convince people that she is not unkind, but that new circumstances require the burden be shared across society. But fundamentally, Reeves needs to make sure that her promises of future growth will happen, and importantly will be shared with all. People will support her decisions if she can provide reasonable assurance that this will translate into growth and jobs for all – but those assurances are not there. Her new investments tend to be in technology intensive areas which will not benefit the most vulnerable and less skilled.

Breaking promises is never painless, and in this case, it seems to have been politically too costly for Labour. But leadership is also about making hard choices in hard times. Reeves’ challenge now amidst the mess of conflicting pre-Budget briefings is to cut through the noise, and convince the public of the clarity and honesty of her message.