Keir Starmer refrained from ruling out a potential increase in income tax beyond the commitments made in the Labour Party’s manifesto during next month’s Budget session, as disclosed during PMQs. Although the Prime Minister assured that there would be no revival of austerity measures, he did not explicitly reaffirm Labour’s pledge to abstain from hiking taxes on working individuals, including income tax, VAT, and national insurance, as stated in the party’s manifesto for the previous General Election.
When questioned by Conservative leader Kemi Badenoch during PMQs regarding Labour’s tax promises, Mr. Starmer evaded a direct response and indicated that the government’s fiscal plans would be unveiled at Chancellor Rachel Reeves’s Budget presentation on November 26.
In response to Ms. Badenoch’s inquiry about the Prime Minister’s commitment to the manifesto pledges, Mr. Starmer diverted the focus to the economy’s positive indicators. He highlighted that retail sales exceeded expectations, inflation decreased, economic growth projections were revised upwards, and the UK stock market had reached record levels. Mr. Starmer assured the House that the upcoming Budget would outline plans to strengthen the economy, reduce NHS waiting lists, and ensure a prosperous future for the country.
Subsequent to PMQs, the Prime Minister’s press secretary refrained from reiterating the manifesto’s stance on shielding working individuals from specific tax increases, emphasizing that the official position would be clarified during the forthcoming Budget announcement on November 26. Reports suggested that Chancellor Reeves is contemplating an income tax hike to address a financial deficit estimated between £20 billion and £30 billion and adhere to expenditure guidelines. Among the proposed options is an examination of a 1p increase in the basic rate of income tax, potentially generating around £8 billion.
Speculations have also surfaced regarding a possible escalation in higher income tax rates during the November 26 Budget session. The current tax regime imposes a 40% income tax rate on earnings surpassing £50,271 and a 45% rate for incomes exceeding £125,140. A Treasury spokesperson declined to comment specifically on tax alteration speculations when approached by The Mirror last week.
