No shortcuts in a realistic Budget, country is warned

Sir Keir Starmer has issued a grim warning on a Budget that is expected to feature record-breaking tax rises.

- DAVID MADDOX, ARCHIE MITCHELL

The prime minister used a major speech in Birmingham yesterday to pave the way for “tough decisions” when Rachel Reeves delivers her first statement tomorrow.

With his government already under siege for its economic plans, Sir Keir tried to clear up what he means by “working people”, whose taxes he has promised to protect. The prime minister mentioned “working people” 24 times in his speech as he tried to see off criticism over his own vague definition, saying “they know who they are”.

In his party’s manifesto, there was a promise not to increase income tax, national insurance or VAT but already that appears to be under threat, with a rise in the employers’ rate of national insurance now widely expected. In addition, there are expected to be tax raids on inheritance and capital gains as the chancellor attempts to close a £40bn gap between spending plans and government income.

The prime minister attempted to pin the blame for the tax rises to come in a grim Budget on the inheritance left to his government by the Tories. Critics have noted that bumper pay rises for the public sector, particularly doctors and train drivers, have made matters much worse.