Keir Starmer says there COULD be more tax rises to come after Budget mega-raid… as business chiefs downgrade UK growth forecasts_Nhy
Keir Starmer has admitted that there could be more tax hikes to come – despite Rachel Reeves insisting there will be no repeat of the Budget mega-raid.
The PM refused to rule out increasing the burden again if there were ‘unforeseen circumstances’.
The comments will fuel concerns that Labour‘s spending plans look ‘implausible’ even after the Chancellor’s record revenue-raising package.
Meanwhile, business chiefs have downgraded forecasts for the economy as they reel from the impact of the national insurance rise.
Sir Keir has been pushing his latest effort to ‘reset’ the government following a torrid first five months in power.
Yesterday the premier laid out six ‘milestones’ that must be hit by the end of the Parliament, including raising living standards and building 1.5million new homes.
Keir Starmer refused to rule out increasing the burden again if there were ‘unforeseen circumstances’
But grilled by the BBC on the possibility of more tax rises, Sir Keir said: ‘I don’t want to suggest we’re going to keep coming back for more because that isn’t the plan.’
‘What I can’t do, is say to you there are no circumstances unforeseen in the future that wouldn’t lead to any change at all.
‘If you look at Covid and Ukraine, everyone knows there are things we can’t see now but I can tell you our intention was to do the tough stuff in that Budget, not keep coming back.’
Asked why his popularity has slumped since the election, Sir Keir argued that he had taken ‘tough decisions’.
‘I just don’t want to do what politicians have done in the past which is to get in the warm bath of empty promises,’ he said.
‘I’m prepared to roll up my sleeves and tell people its tough – we’re going to do it but you’re going to be better off.
‘You’ll have a better health service, you’ll have better houses, you’ll have better energy bills at the end of this and I’ll be judged, quite rightly, at the end of the parliamentary term whether I’ve delivered on what I said I would deliver on.’
Ms Reeves seemed to pledge last month that there would be no more tax rises in this Parliament, amid warnings of job losses and pay being suppressed.
But she has since refused to repeat the commitment.
The CBI has downgraded its growth projection for 2024 and 2025 and predicted an uptick in inflation in its latest economic forecast.
Forecasts from the influential lobby group have predicted that UK GDP will increase by 0.9 per cent this year – down from 1 per cent in its June predictions.
It is now also expecting 1.6 per cent growth in 2025, downgraded from an estimate of 1.9 per cemt from June.
GDP growth is expected to slow to 1.5 per cent in 2026.
Economists at the CBI said tax and cost increases – such as the rise in national insurance contributions and the increase in the national living wage – have significantly contributed to the downgrade.
Ms Reeves (pictured with Cabinet colleague Ed Miliband yesterday) seemed to pledge last month that there would be no more tax rises in this Parliament, amid warnings of job losses and pay being suppressed
The growth in the economy will be largely driven by household spending, with higher-than-inflation wage growth expected to help consumer spending pick up further next year, it said.
However, the CBI said consumption is expected to be lower in 2025 than its previous forecasts as inflation takes longer to come back to the 2 per cent target rate, putting pressure on household budgets.
Inflation is due to pick up further over the rest of the current quarter, having risen to 2.3 per cent in October, it added.
The CBI said it expects this to average 2.6 per cent for 2025 and 2.5 per cent for 2026, with Budget pressures expected to particularly contribute to higher retail and hospitality pricing.
As a result, it has forecast that interest rates – which currently sit at 4.75 per cent – are set to be higher for longer than previously predicted.
