Starmer refuses to rule out breaking his manifesto promise by raising taxes in the budget to cover a £40 billion shortfall

Starmer refuses to rule out breaking his manifesto promise by raising taxes in the budget to cover a £40 billion shortfall

Sir Keir Starmer has backed his government’s record on the economy yet stopped short of ruling out the possibility of tax increases in the autumn Budget.  

Speaking to broadcasters during a visit to Milton Keynes, the prime minister challenged figures from the National Institute for Economic and Social Research (NIESR) that suggest Chancellor Rachel Reeves will confront a shortfall of over £40 billion later this year. He said he did not “recognise” some of the numbers cited by the think tank.  

The NIESR report warns that, without new revenue measures, the public finances will face a funding gap that may only be closed through tax rises.  

At Prime Minister’s Questions last month, Starmer reiterated Labour’s manifesto promise not to raise income tax, national insurance contributions, or VAT. However, when asked today whether those pledges still held, he offered no explicit guarantees.  

Instead, Starmer said that the autumn forecast will provide the basis for the Budget and that the government’s priority will be on improving quality of life. “We’ll focus on quality of life so we can build on what was achieved in the first year of this administration,” he explained.  

He pointed to four interest-rate cuts since Labour took office as evidence of economic stability, highlighting the real-term benefit for mortgage holders in reduced monthly payments. He also noted that wage increases across the private sector and rises to the minimum wage have given people more disposable income.  

“The detailed measures will be set out in the Budget, but the focus will very much be on living standards and making sure people feel better off,” the prime minister added.  

When pressed on whether he disagreed with economists who argue that tax rises are necessary to plug the fiscal gap, Starmer again distanced himself from their figures. “Some of the figures being released aren’t figures I recognise,” he said, reiterating that final decisions will follow the autumn forecast, and emphasising the administration’s commitment to easing costs for ordinary families through stronger wages and lower borrowing costs.