Rachel Reeves should not break Sir Keir Starmer’s manifesto promise not to increase income tax, national insurance and VAT, Labour’s deputy leader Lucy Powell has said.
Ms Powell, who defeated Sir Keir’s staunch ally Bridget Phillipson for the deputy leadership last month, heaped pressure on the Chancellor to find alternative ways to plug a £20billion Budget blackhole.
Speaking to the BBC earlier today, Ms Powell said: “We should be following through on our manifesto, of course. There’s no question about that.”
During the 2024 General Election campaign, Sir Keir categorically ruled out raising income tax, VAT or national insurance.
“The Conservatives have raised the tax burden to a 70-year high,” the Labour Party’s 2024 manifesto said.
“We will ensure taxes on working people are kept as low as possible. Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT.”
However, Ms Reeves appeared to break the spirit of the once-ironclad pledge in her maiden Budget by hiking national insurance contributions for employers.
Speaking from Downing Street earlier this week, the Chancellor refused to rule out breaking the manifesto commitment completely.
Rachel Reeves and Keir Starmer have both teased about hiking taxes on November 26
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“We have got to do the right thing,” Ms Reeves said.
Sir Keir also stopped short of sticking to his manifesto pledge last week.
During a heated exchange at Prime Minister’s Questions, Tory leader Kemi Badenoch asked Sir Keir if he stood by his manifesto tax promises.
“As she well knows, no Prime Minister or Chancellor will ever set out their plans in advance,” Sir Keir told MPs.
Lucy Powell defeated Bridget Phillipson to become deputy Labour leader last month
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Following her £40billion tax-raising Budget last year, Ms Reeves also told voters she would not need to raid their pockets again.
The Chancellor said: “[We] put public finances and public services on a firm footing, and as a result we won’t have to do a budget like this ever again.”
Speaking at a CBI event, Ms Reeves added: “I’m really clear. I’m not coming back with more borrowing or more taxes.”
However, Ms Powell’s intervention earlier today also highlighted growing fears from left-wing Labour MPs about working-class voters being stung with tax hikes.
Rachel Reeves ruled out future tax rises after raising £40billion last year
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GETTYThe Manchester Central MP, who also called on Sir Keir to lift the two-child benefit cap in full, said: “Trust in politics is a key part of that because if we’re to take the country with us then they’ve got to trust us and that’s really important too.”
Labour’s support continues to slump in the opinion polls, with both Reform UK and the Green Party.
Despite growing political pressures, Ms Reeves used her pre-Budget speech to lay the foundations for grim tax hikes on November 26.
The Chancellor said: “As I take my decisions on both tax and spending, I will do what is necessary to protect families from high inflation and interest rates, to protect our public services from a return to austerity and to ensure that the economy that we hand down to future generations is secure with debt under control.
“If we are to build the future of Britain together, we will all have to contribute to that effort. Each of us must do our bit for the security of our country and the brightness of its future.
“There is a reward for getting these decisions right, to build more resilient public finances with the headroom to withstand global turbulence, giving business the confidence to invest and leaving government freer to act when the situation calls for it, to continue to invest in our infrastructure and our industry to build a stronger economy and to get the cost of borrowing down, spending less on debt interest and more on schools and on our health service.”
The Prime Minister also warned Labour MPs that the Budget would involve “hard and serious decisions”.
However, Sir Keir insisted the decisions would be “fair”.