Sir Keir Starmer defends Labour’s tax raid Budget and denies breaking manifesto promises
“We made a number of commitments in our manifesto which we have kept, but I accept that… we have asked everybody to make a contribution," said the PM
Sir Keir Starmer defended Labour’s tax-raising Budget as necessary to help people struggling with the cost of living.
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The Prime Minister has also denied breaking Labour’s headline manifesto commitment not to raise taxes on working people.
He said today: “We made a number of commitments in our manifesto which we have kept, but I accept that… we have asked everybody to make a contribution.
“We want to make sure that we have got schools which are fit for the future so that every child can go as far as their talent will take them, and I absolutely wanted to bear down and reduce the cost of living, because for most of your viewers that will be the single most important thing.”
The PM told LBC: "We are a Labour government that has put fairness at the heart of the budget.
"And, yes, we've asked everybody to make a contribution, but that is so that we can protect our NHS, so that it's there for people when they need it and their families when they need it.
"Secondly, to put money into our schools so that every child could go as far as their talent will take them, and thirdly, to allow us to bear down on what is, I think, probably the single most important issue for most families, which is the cost of living.
"We'd already done a number of measures before the Budget, but in the Budget yesterday the Chancellor was able to confirm that rail fares would be capped.
"That's the first time in 30 years that's happened, that prescription charges would be capped. Hugely important for people who need prescriptions, but also that we can reduce energy bills by, on average, £150 for every household. And for particularly poor households, that's £6 million.
"That's on top of the £150 discount that we'd already put in place at this time of year, as we go into winter. That will make a material difference to families across the country, some of whom will be worrying about whether they could put their heating on or whether they can put it on to the level that they really want, because this is a huge anxiety. And so to be able to take that off for all families as an average is hugely important to us."
His comments come after the chancellor refused to rule out more tax rises in next year’s Budget after dropping a £30bn tax bomb on Britain yesterday.
Asked by Nick Ferrari this morning whether there would be “no more tax increases as when you present next year’s Budget,” Rachel Reeves said: “No chancellor can predict the future or write next year’s Budget.
“I made my choices yesterday."
She said she made “fair and necessary choices” adding “Chancellors have to respond to events.”
Hard-working Brits were clobbered with a manifesto-shattering series of tax rises, with a £13bn freeze on income tax and national insurance thresholds lasting three years as part of a £26 billion package of increases largely targeting the middle classes.
She also defended her decision to abolish the two-child benefit cap.
Read more: What's in the Budget? Key points at a glance
Read more: Reeves sets Britain on path to highest-ever tax burden with £26bn Budget raid
She told Nick: “Sixty per cent of people that will benefit from the two-child change are people in work. But child poverty is pervasive and there are a lot of people who go to work every day and still aren’t earning enough to put food on the table and pay their energy bills. This will lift directly 450,000 kids out of poverty.”
“At 60 per cent of median income, that’s how poverty is measured. It’s how it has been for a very long time. The median income is around £35,000 a year. I haven’t got the exact numbers to hand.”
Ms Reeves added: “This puts more money in the pockets of low-income families and when you talk to teachers about the poverty that many children are experiencing, when you talk to nurses who work in the health service, when you see working people showing up at food banks ... There’s not enough money for the essentials and I’m not going to make any apologies for lifting people out of poverty.”
Last night Tory leader Kemi Badenoch accused Ms Reeves and Sir Keir Starmer of using public money to bribe backbenchers in order to keep their jobs.
Around a quarter of Britain’s working population will be paying higher or top rate tax by 2030-32 as a result of Rachel Reeves’s Budget.
Consequently, the tax take is projected to reach 38 per cent of GDP in the same time-frame.
Workers, homeowners mainly in the South East, pension savers, and people who save carefully into Isas will all have the Chancellor’s fingers in their pocket.
More workers will be dragged into higher tax bands, after the Chancellor extended the deep freeze on thresholds by a further three years to 2031.
Saving your pay efficiently into pensions will also be taxed.
The overhaul – enforced from 2029 – will result in any pre-tax contributions above £2,000 incurring National Insurance charges from both the employee and employer. Currently, there is no limit.
A “mansion tax” targeting England’s most expensive homes valued at more than £2m will come into force from 2028. It will mean an additional tax bill for these households of around £5,000.
The amount that people can deposit tax free into a cash Isa each year has been slashed from£20,000 to £12,000.
Over 65s will however retain the full allowance.
Under 65s will be encouraged to put the remaining £8,000 of their allowance into a stocks and shares Isa.
Electric car drivers will also be targeted, a pay-per-mile pricing scheme will be introduced for electric car drivers from 2028. The 3p tariff – added to car tax bills based on predicted annual mileage – will add around £255 in costs for the average driver covering 8,500 miles.
Reversals to the government's previously announced cuts to winter fuel payments and health-related benefits will cost £7bn in 2029-30, according to the OBR.
Along with the removal of the two-child benefit cap - costing £3bn by 2029-30 - the OBR estimates this will increase benefits for 560,000 families by an average of £5,310.
The Budget announcement was plunged into chaos after the Treasury watchdog accidentally published the details before the Chancellor stood up.
In a shambolic error, the Office for Budget Responsibility (OBR) leaked its assessment of Ms Reeves's fiscal plans 30 minutes before she was due to unveil them in the House of Commons.
The documents, which were revealed just minutes after Ms Reeves brandished her red box outside 11 Downing Street, showed that tax is due to rise by £26 billion, with thresholds frozen for another three years.