Keir Starmer remains tight-lipped on stealth tax U-turn
Keir Starmer refused to rule out introducing tax hikes on British workers despite being challenged on past commitments to unfreeze tax thresholds from 2028.
Starmer attempted to deflect opposition leader Kemi Badenoch’s questions as she recited comments he and the Chancellor had made over the last year on pledges not to extend a freeze on income tax thresholds.
He said Badenoch was trying to “speculate and distort” comments he made stating that tax thresholds would not remain frozen amid swirling rumours the government could raise more than £7bn from the policy widely referred to as a stealth tax.
Badenoch also highlighted Reeves’ commitment to unfreeze the thresholds at last year’s Budget as a “deliberate statement of public policy”.
In response to the Tory leader’s questions on an expected government U-turn, Starmer said: “The Budget is one week today and we will lay out our plans.
“I’ve said what we will do in terms of protecting the NHS and public services.What we won’t do is inflict austerity on the country as they did. What we won’t do is inflict a borrowing spree like Liz Truss did.
“They haven’t listened and they haven’t learned.”
Starmer and Reeves condemn leaks
Starmer was also challenged on leaks to newspapers suggesting that income tax hike plans had been ditched due to improved Office for Budget Responsibility (OBR) forecasts.
The latest PMQs bout will fuel speculation that sweeping tax rises are due to be unveiled next week.
Bond traders reacted negatively to the reported abandonment of income tax hikes given the measure is seen as being least damaging for growth and reliable for increasing government receipts.
Analysts at Deutsche Bank warned on Wednesday morning that public finances would not be fixed as the headroom was expected to marginally increase to around £15bn next week.
Badenoch warned the Budget would “hurt working people” and criticised Starmer’s praise for inflation coming down, pointing out that inflation had “nearly doubled” over the last year and that food price inflation had jumped to 4.9 per cent.
Earlier on Wednesday, the Chancellor condemned leaks from the Treasury to the media over Budget plans.
She told broadcasters on Wednesday: “Leaks are not acceptable.
“But people only have to wait a week now until I deliver my Budget on Wednesday November 26.
“The priorities of that Budget will be to tackle the cost of living, to get NHS waiting lists down and to reduce national debt.”