Prime Minister Keir Starmer stopped short Wednesday of reaffirming Labour’s campaign pledge not to raise major taxes, as growing fiscal pressures fuel speculation that the government may be preparing to walk back one of its promises.
During a tense Prime Minister’s Questions session in the House of Commons, Opposition Leader Kemi Badenoch asked directly whether Starmer still stood by his pre-election vow not to increase income tax, national insurance, or value-added tax.
“Last year, in his manifesto, Labour promised not to increase income tax, not to increase national insurance and not to increase VAT. Does the Prime Minister still stand by his promises?” Badenoch asked.
Starmer avoided repeating the commitment, instead citing Britain’s improving economic indicators.
“Retail sales are higher than expected, inflation is lower than expected, growth has been upgraded this year and the UK stock market is at an all-time high,” he said.
“Well, well, well, Mr. Speaker,” Kemi quipped. “What a fascinating answer. It is not the same answer that I received when I asked exactly the same question, word for word, on the 9th of July. Then the Prime Minister replied with just one word — ‘yes’ — and then he sat down with a smug grin on his face.”
The hesitation comes as economists warn the Treasury faces a £35 billion budget shortfall ahead of next month’s fiscal statement.
A Westminster source suggested this was the clearest indication yet that tax rises could be coming in next month’s budget. With the Chancellor facing a £35 billion shortfall and ministers unwilling to cut spending, smaller tax changes would bring in little relief. The real revenue, the source noted, lies in income tax, VAT, and national insurance—the government’s main levers for raising funds.
The Chancellor has signaled in recent days that the Office for Budget Responsibility is expected to downgrade productivity forecasts, tightening fiscal room even further.
The Budget, due in four weeks, now looms as an early test of Labour’s fiscal credibility—and its willingness to sacrifice campaign pledges in the face of mounting fiscal reality.
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