Keir Starmer refrained from ruling out a potential increase in income tax beyond what was promised in the Labour manifesto during next month’s Budget session. While responding to questions during PMQs, the Prime Minister emphasized a move away from austerity measures but did not reiterate the party’s pledge made during the last General Election to avoid raising taxes on working individuals, including income tax, VAT, and national insurance, if they came into power.
During PMQs, Conservative leader Kemi Badenoch inquired about Starmer’s commitment to the manifesto pledge. Starmer evaded a direct response and indicated that the government would unveil its fiscal plans at Chancellor Rachel Reeves’s Budget presentation on November 26.
Badenoch highlighted Labour’s previous promise not to increase income tax, national insurance, or VAT, and sought confirmation from the Prime Minister. Starmer’s response focused on positive economic indicators, mentioning higher retail sales, lower inflation, upgraded growth forecasts, and a thriving UK stock market. He assured the House that the government would outline plans to fortify the economy, reduce NHS waiting lists, and secure a brighter future for the nation during the Budget announcement.
Following PMQs, the Prime Minister’s spokesperson declined to reiterate the party’s stance on shielding working people from certain tax hikes as outlined in the manifesto, stating that the Budget details would be disclosed on November 26 once the Office for Budget Responsibility finalizes its forecasts.
Reports have surfaced suggesting that Chancellor Reeves is contemplating an increase in income tax to offset a substantial budget deficit. One proposal being considered involves adding 1p to the basic rate of income tax, potentially generating around £8 billion in revenue. Another speculated option is a rise in higher income tax rates, with the current thresholds set at 40% for incomes over £50,271 and 45% for earnings exceeding £125,140. The Treasury has refrained from commenting on these tax adjustments in the lead-up to the Budget.
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