UK (Parliament Politics Magazine) – UK PM Sir Keir Starmer declines to rule out freezing income tax thresholds ahead of the Budget, raising questions over Labour’s spending plans and pledges.
As reported by The Independent, Labour leader Keir Starmer signals a potential freeze on income tax ahead of the upcoming Budget.
The prime minister dodged questions from Conservative leader Kemi Badenoch, citing a potential breach of Labour’s manifesto.
At Prime Minister’s Questions, Chancellor Rachel Reeves was branded “clueless Chancellor,” with concerns raised over growing speculation.
How did Keir Starmer respond to Kemi Badenoch’s questions on an income tax freeze?
During Wednesday’s Commons session, Kemi Badenoch repeatedly asked the Prime Minister to clarify whether income tax would be frozen.
She said,
“This is the first Budget to unravel before it’s even been delivered. The Chancellor’s cluelessness, I’m afraid, is damaging the economy now. The Prime Minister needs to end this shambles.”
Ms Badenoch asked,
“So, can he confirm today that he won’t break another promise by freezing income tax thresholds?”
Sir Keir Starmer responded,
“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.”
The Tory leader continued,
“It is quite clear that they are going to freeze thresholds. We didn’t get a clear answer from them but this is really important, because in her budget speech last year, the Chancellor said, and I quote: ‘I am keeping every single promise on tax that I made in our manifesto.’”
She said,
“So, there will be no extension of the freeze in income tax and national insurance thresholds. Why was freezing thresholds a breach of the manifesto last year, but it isn’t this year?”
The Labour leader replied,
“Every week she comes along and speculates and distorts. They opposed NHS investment and what did we get? Five million extra appointments in the first year of a Labour Government.”
Mr Starmer added,
“They tried growing the economy with millions on NHS waiting lists, with our schools crumbling and holes in our roof. It didn’t work. What do they want to do now? Go back to the same failed experiment.”
Ms Badenoch later stated,
“The Budget chaos is causing real anxiety. People aren’t buying houses, businesses aren’t hiring, and they are cancelling investment decisions. Two weeks ago, the Chancellor called a ridiculous press conference to blame everyone else for her having to raise income tax. Then last week, she U-turned on her own U-turn instead.”
She asked,
“We can see they’re planning to freeze income tax thresholds, something she said last year would be a breach of their manifesto. They are making it up as they go along. Doesn’t the country deserve better than government by guesswork?”
The prime minister responded,
“Either we renew our country with Labour or we go back to austerity 2.0 with Reform or the Tories. They left waiting lists at record highs, almost a million more children in poverty, and they wrecked our public services. She comes here to talk down the country. We’re turning the page – more NHS appointments, free breakfast clubs, free childcare, more homes and better public services.”
He added,
“That’s what we’re fighting for – a Britain built for all.”
After PMQs, a Tory Party spokesperson said,
“The Prime Minister repeatedly failed to repeat the promise made by the Chancellor in her budget last year to end the freeze on income tax thresholds.”
They added,
“Rachel Reeves said any freeze in thresholds would be a breach of the Labour manifesto and would ‘hurt working people’. If she doesn’t end the freeze at the Budget next week, it will be yet another broken promise from a Government that has lost the trust of the British people.”
The Conservative leader previously said the chancellor is likely to play the “victim,” holding the Tories responsible for upcoming tax increases.
She said Ms Reeves would argue that austerity and Brexit forced her hand, rather than it being her own decision to increase welfare spending.
Ms Badenoch admitted that her party had been “wrong” to repeatedly freeze income tax thresholds while in government.
If elected, the Conservative Party plans to cut public spending by £47bn, including £23bn from welfare. Asked if the UK could avoid bankruptcy, Mrs Badenoch replied, “No.”
What did Keir Starmer say about Nigel Farage’s alleged racist behaviour?
Sir Keir Starmer urged Reform UK leader Nigel Farage to respond to allegations of racist conduct in his teenage years, which Mr Farage denied.
He said,
“Mr Speaker, he [Anderson] talks about dog whistle. Last week his leader said he didn’t have time to condemn the racist comments of his fellow MP for Runcorn.”
The prime minister added,
“He also said he didn’t have time to condemn his party calling children in care evil. He didn’t have time. I wonder if we could ask his leader next door to him whether he’s got time for his explanation for the stories in today’s papers.”
His remarks came after Lord Walney, a crossbench peer and former adviser on political extremism, called the Guardian’s reports credible and said Mr Farage’s response would concern the public.
The Reform leader has denied all allegations of antisemitic or racist behaviour as a teenager, including claims he targeted minority-ethnic students, sang offensive songs, or burned a school roll.
John Woodcock, known as Lord Walney, warned that a future prime minister should not dismiss such allegations.
He said,
“These detailed testimonies from Mr Farage’s contemporaries appear credible and describe a degree of extremism that cannot be summarily dismissed as irrelevant simply because it was alleged to have occurred when he was a teenager.”
Lord Walney added,
“Many people will readily accept that young people can espouse offensive or extreme views that should not define their character as an adult.
They will be more concerned by the fact that Mr Farage is apparently now completely denying he ever said anything racist or antisemitic as a child, despite several public statements to the contrary from people who say they were on the receiving end of it from him.”
What did Zack Polanski ask Rachel Reeves in his letter?
Green Party leader Zack Polanski has urged Rachel Reeves to introduce a wealth tax and align capital gains tax with income tax.
The letter also called for broad measures to cut energy bills, control rents, and abolish the two-child benefit cap.
Mr Polanski added,
“Our message to Rachel Reeves is simple: cut bills, tax billionaires.”
What are the implications of freezing income tax thresholds?
When Labour took office last year, its main promise was not to raise national insurance, income tax, or VAT.
An extended freeze on tax thresholds until 2030 now appears likely, with the income tax personal allowance frozen at £12,570.
Unlike previous years when allowances rose with inflation or earnings, this year the allowance and tax rates will remain frozen.
Economists warn this could cause “fiscal drag,” where rising incomes push more people into higher tax brackets while thresholds remain unchanged.
What is a wealth tax?
A wealth tax is a tax on an individual’s net worth, usually applied as an annual percentage on the total value of assets exceeding a certain threshold. It is calculated on net worth, the difference between someone’s total assets and liabilities.
The UK government is considering higher taxes on the wealthy, including reforms to inheritance tax, capital gains tax, and property taxation. A proposed annual wealth tax could target extremely wealthy individuals; for example, a 2% tax on wealth above £10 million has been discussed.
