Britain’s Prime Minister Keir Starmer on Wednesday declined to commit to a previous pledge not to raise taxes on working people ahead of a budget next month, saying upcoming forecasts would show the economy was in a worse state than thought.
Economists have said finance minister Rachel Reeves may have to break the government’s promise and raise income tax, a move that would break the commitment Labour made to voters ahead of the election in 2024.
Conservative Party opposition leader Kemi Badenoch asked Starmer if he stood by his promise not to increase income tax, social security contributions or value added sales tax.
Starmer said the government would lay out its plans in the budget on November 26.
Badenoch said he had given the single-word answer “yes” when asked exactly the same question in July.
Starmer said he would not announce the budget plans in advance but an expected downgrade of Britain’s productivity outlook by official forecasters represented a judgment on the Conservatives’ 14 years in office.
“Those figures are now coming through, and they confirm that the Tories (Conservatives) did even more damage to the economy than we previously thought,” Starmer said.
Britain’s budget watchdog is expected to cut its productivity forecast by a larger-than-expected 0.3 percentage points, people familiar with the situation said on Tuesday, potentially leading to a 20 billion-pound ($26.8 billion) hit to the public finances.
Reeves is believed to be considering a range of options to remain on course for her target of balancing day-to-day spending with tax revenues by the end of the decade.
The Telegraph newspaper later reported that Reeves was considering a 2 pence rise in income tax – a move which the think tank Resolution Foundation said last month would raise 6 billion pounds.
The report said what Reeves is considering would see basic income tax rate rising to 22% from 20% and the higher and additional rates increasing to 42% and 47% respectively, while National Insurance contributions would fall to 6% from 8% for basic-rate taxpayers and to zero from 2% for higher earners.
(Reporting by Paul Sandle）
