Starmer refuses to rule out breaking manifesto pledge with Budget tax raid

The Prime Minister declined to keep good on his pre-election promise to not hike National Insurance, income tax or VAT.

He was repeatedly pressed on the matter by Conservatives leader Kemi Badenoch during Prime Minister’s Questions in the House of Commons on Wednesday.

But the PM batted away Badenoch’s questions, responding: "The Budget is on November 26 and we will lay out our plans."

Sir Keir also appeared to dodge queries on whether Labour would extend a freeze on income tax personal allowances, which has been branded a 'stealth tax'.

It comes amid speculation that Chancellor Rachel Reeves will break the pledge by raising taxes to plug a hole in the public finances.

Read more: Reeves blames Brexit for high inflation as Chancellor plots income tax hike

Read more: Why it's time for Rachel Reeves to ditch her 'very foolish promise', writes Andrew Marr

Reports last week suggested Ms Reeves was considering an income tax hike, with the Institute for Fiscal Studies estimating she needed to plug a £22 billion hole using tax rises or spending cuts.

Some economists have estimated this figure could be as high as £50billion.

The gap is the result of higher borrowing costs, more persistent inflation and weaker growth, along with spending commitments such as partially reversing the cut to winter fuel payments and watering down its plans to cut welfare.

But on Tuesday, Ms Reeves stressed that her promises still "stand", adding that she would “continue to support working people by keeping their taxes as low as possible”.

She also hinted at higher taxes on the wealthy, insisting that “there is another way to improve the fiscal position: growing the economy”.

But Ms Reeves did acknowledge that productivity forecasts from the Office for Budget Responsibility (OBR) could make for tough reading.

She argued that austerity, Brexit and the pandemic had left "deep scars" on the UK's economy.

But the Chancellor added that she was "determined that we don't simply accept the forecasts but we defy them" and would not "relitigate the past or let past mistakes determine our future".

Writing for LBC Opinion, Andrew Marr argues the big question now is whether Ms Reeves “should scrabble around finding more ‘small’ taxes to raise, perhaps on gambling or on the banks or on inheritance, pensions, creating further political firestorms around her.”

Or, he adds, should she "take a deeper breath and announce, because of the economic situation she has no choice but to break her election promise and raise (for instance) income income tax by (for instance) around 2p."