Prime Minister Sir Keir Starmer has explicitly refused to rule out implementing tax increases that would break key promises made in his party's 2024 election manifesto, setting the stage for a potentially contentious budget announcement next week.
Repeated Refusals on Tax Pledge
In a significant interview with Sky News' Political Editor Beth Rigby, conducted during the G20 summit in South Africa, the Prime Minister was pressed twelve separate times on whether he would honour his party's manifesto commitment not to raise taxes on working people. On each occasion, he declined to give that assurance.
The 2024 Labour manifesto had been unequivocal, stating: "We will not increase taxes on working people, which is why we will not increase national insurance, the basic, higher, or additional rates of income tax, or VAT." This core pledge was a central tenet of their election campaign.
A 'Difficult Backdrop' for Decisions
When asked by Rigby about the importance of politicians keeping their word, Sir Keir agreed that it was crucial but immediately added a major caveat. "They have to make decisions against a political backdrop. And, we've also got big decisions to make in the budget that's coming in just a few days time," he stated.
This response signals a clear expectation that the government's Wednesday fiscal event will involve substantial tax increases. The apparent U-turn is believed to be driven by the need to fund existing spending pledges and create more fiscal headroom amid worsening economic forecasts.
The Prime Minister emphasised that the budget would be guided by principles of "fairness" and would focus on three key areas: supporting the NHS, reducing national debt, and tackling the cost of living crisis, which he identified as the "number one issue" for the public.
Stealth Tax Rise on the Table
One specific measure that has not been ruled out is a "stealth tax rise" through the freezing of income tax thresholds. This policy would drag more people into higher tax brackets as their wages increase, effectively raising their tax burden without changing the headline rates.
Rigby pointed out the apparent contradiction, noting that Chancellor Rachel Reeves had previously stated that freezing thresholds would "hurt working people." When asked if he agreed with his chancellor's past assessment, Sir Keir sidestepped the question, replying, "We are going to set out our decisions."
This interview marks a stark contrast from the government's position ahead of the 2024 Budget, where the Prime Minister was more definitive in ruling out rises to income tax, national insurance, and VAT. With the budget just days away, the repeated refusal to recommit to these promises suggests significant tax announcements are imminent.
