The Labour Party currently leads the polls a week ahead of the public vote for the next government, and if they do win, the next Chancellor Rachel Reeves could end up with more leeway to spend than previously forecast.
In the March Budget a few months ago, current Chancellor Jeremy Hunt showed OBR forecasts allowing a near £9 billion headroom in the Treasury's books.
Now favourable recent updates to forecasts have come to be due to a lower than expected forecast on government borrowing for the next 5 years and higher than expected tax income from wage inflation - all placing the leeway at between £13 billion up to £38 billion (if revenues from housing related income continue).
If spending plans were kept as they currently are, the extra space in the Budget books would allow extra budgeted spending or the early ending of the freeze on the tax-free and allowance and higher rate thresholds. Jeremy Hunt had himself stated last Summer that taxes could be cut based on lower than expected borrowing and he then followed through with NIC cuts.
Labour's plans for tax didn't explicity state any changes to income tax, national insurance and VAT - but did state a stamp duty raise and there have been rumours of changes to capital gains taxes. However, these tax plans are set to fund the extensive spending plans detailed in their costed manifesto.
The ongoing freezing of the tax thresholds and personal allowances has created a 'fiscal drag' effect that is contributing to growing numbers of people paying more tax through salary increases/inflation effects and many also being dragged into the higher rate tax bands.
The current tax bands and allowances are to be frozen until 2028 - but inflation adjusted (based on average weekly salaries) the personal allowance should be at over £14,000 (around £1,500 higher) and the higher rate threshold should kick in nearly £5,000 later.
If Reeves does unfreeze the bands/allowances as above an average income earner could be saving around £300 in taxes paid.