Keir Starmer left open the possibility of increasing income tax in the upcoming Budget during a recent session of PMQs. While the Prime Minister assured that there would be no return to austerity measures, he refrained from reiterating Labour’s pledge from the last General Election not to raise taxes on working individuals, including income tax, VAT, and national insurance.

When questioned by Kemi Badenoch at PMQs about Labour’s tax promises, Mr. Starmer avoided a direct answer, stating that the government would reveal its fiscal plans at Chancellor Rachel Reeves’s Budget presentation on November 26.

In response to Ms. Badenoch’s query regarding tax commitments, Mr. Starmer emphasized positive economic indicators such as increased retail sales, lower inflation, upgraded growth projections, and a booming stock market, while affirming that the Budget would focus on strengthening the economy, reducing NHS waiting lists, and securing a brighter future for the nation.

Following PMQs, the Prime Minister’s spokesperson declined to reaffirm the manifesto pledge safeguarding working people from tax hikes, highlighting that official announcements would be made at the Budget, pending the final forecasts from the Office for Budget Responsibility (OBR).

Reports suggest that Chancellor Reeves is contemplating an income tax increase to address a substantial budget deficit, with options including adding 1p to the basic income tax rate, projected to generate approximately £8 billion. Speculation also surrounds a potential hike in higher income tax rates in the Budget, with current rates set at 40% for earnings over £50,271 and 45% for incomes exceeding £125,140. The Treasury refrained from commenting on tax adjustment speculations.

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