Labour leader Keir Starmer did not definitively reject the possibility of a tax increase in the upcoming Budget during a recent session of PMQs. Although Prime Minister Boris Johnson assured that there would be no return to austerity measures, he refrained from echoing the Labour party’s previous commitment made in last year’s General Election manifesto not to raise taxes on working individuals, including income tax, VAT, and national insurance.
When questioned by Tory leader Kemi Badenoch at PMQs about upholding this pledge, Starmer evaded a direct response and indicated that the government’s fiscal plans would be revealed during Chancellor Rachel Reeves’s Budget presentation on November 26.
In response to Badenoch’s inquiry about Labour’s promise from the previous manifesto, Starmer redirected the focus to the economy’s positive indicators, highlighting higher-than-expected retail sales, lower inflation rates, upgraded growth projections, and record highs in the UK stock market. He reiterated that the government’s economic strategy would be outlined in the upcoming Budget, emphasizing a commitment to strengthening the economy, reducing NHS waiting lists, and securing a better future for the nation.
Following PMQs, the Prime Minister’s press secretary declined to reiterate the previous stance on tax hikes outlined in the manifesto, emphasizing that the Budget announcement on November 26 would provide clarity, pending the final forecasts from the Office for Budget Responsibility (OBR).
Reports suggest that Chancellor Rachel Reeves is exploring potential tax increases, including a potential 1p rise in the basic rate of income tax, projected to generate approximately £8 billion in revenue. Other options under consideration for the Budget include adjustments to the higher rates of income tax, with the existing 40% rate applicable to incomes over £50,271 and the 45% rate to those earning above £125,140. The Treasury has refrained from commenting on speculations regarding tax changes, as reported by The Mirror.
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