Starmer: If we get Budget right we’ll have a ‘great future’
The prime minister says he’s “optimistic” about the Budget, insisting “if we get this right, our country has a great future.”
The budget next week will be a huge test for Sir Keir Starmer after hitting a historic low in the polls, and facing growing speculation about challenges to his leadership.
Speaking to reporters as he travelled to the G20 summit in South Africa, Starmer said the Budget will be “based on fairness.”
The PM blamed the financial crash, austerity, Brexit, and other world events for the poor state of the economy.
“Of course the right decisions have to be taken,” he said.
“We have to see this in the context of 16, 17 years now, where he had the crash in 2008, followed by austerity, followed by a not very good Brexit deal, followed by Covid, followed by Ukraine, and that’s why we have to take the decision to get this back on track.”
After months of speculation, Chancellor Rachel Reeves is set to announce an assortment of tax rises in order to fill the £20 billion black hole in the public finances.
Last week the government appeared to u-turn on their plans for a manifesto breaking hike to income tax, after improved estimates on wage growth and tax receipts reduced the gap in the public finances from £30-35 billion to £20 billion.
The Chancellor is now expected to extend the freeze on income tax thresholds for another two years until 2030, in what is seen as a “stealth tax” as many people will be dragged into higher tax brackets.
“It’ll be a Labour Budget with Labour values,” Starmer told reporters.
“It will have absolutely in mind protecting our public services, particularly the NHS, cutting our debt, and dealing with the cost of living.
Among some of the measures expected to be announced by Reeves in the Budget is plans for a ‘mansion tax’ on some of the most expensive homes.
The government is considering adding an increased council tax levy on homes worth more than £1.5 million by revaluing properties on the highest council tax bands, impacting around 310,000 properties.
It’s understood they’re also looking at a 1% tax on properties worth at least £2 million.
Asked about whether people like him living in expensive homes should pay more tax, Starmer said: “I’m not going to get ahead of the Budget, but the principles will be based on fairness.”
The Chancellor is also expected to announce the two-child benefit cap will be scrapped, a cap on salary sacrifice pension schemes, a reduction in the VAT paid on energy bills, a ‘milkshake tax’ on pre-packaged milk based drinks, and a new levy on electric cars.
