Keir Starmer was questioned during PMQs about the possibility of a significant increase in income tax in the upcoming Budget. While the Prime Minister assured that there would be no return to austerity measures, he did not reiterate Labour’s commitment from the last General Election not to raise taxes on working individuals. The Conservative leader, Kemi Badenoch, pressed Starmer on whether he still honored this pledge, to which Starmer evaded a direct response, stating that the government’s plans would be revealed during the Budget announcement by Chancellor Rachel Reeves on November 26.
Starmer highlighted positive economic indicators during the exchange, mentioning higher retail sales, lower inflation, upgraded growth forecasts, and a record-high UK stock market. He emphasized that the government’s economic strategy would be outlined in the upcoming Budget to strengthen the economy, reduce NHS waiting lists, and secure a better future for the country.
Following PMQs, the Prime Minister’s press secretary refrained from confirming the previous commitment in the manifesto regarding tax increases for working people, emphasizing that the Budget details would be disclosed on November 26 after the OBR’s final forecasts. Speculation arose that Rachel Reeves might consider raising income tax to address a substantial budget deficit, with proposals including adding 1p to the basic tax rate, potentially generating around £8 billion. Another suggestion hinted at raising higher income tax rates, which currently stand at 40% for earnings over £50,271 and 45% for incomes exceeding £125,140. The Treasury declined to comment on these speculations.
This uncertainty surrounds the looming Budget as possible tax adjustments are contemplated to address financial challenges, awaiting the official announcement on November 26.
