Keir Starmer has been told to “wake up” after he refused to rule out a stealth tax in the upcoming Budget.
In a fiery PMQs clash with Conservative Party leader Kemi Badenoch, the Prime Minister was asked whether he will rule out freezing income tax thresholds at the Budget.
She said: “This is the first Budget to unravel before it’s even been delivered. The Chancellor’s cluelessness, I’m afraid, is damaging the economy now.
“The Prime Minister needs to end this shambles. So can he confirm today that he won’t break another promise by freezing income tax thresholds?”
Sir Keir dodged the question, saying: “The Budget is one week today and we will lay out our plans. But what we won’t do is inflict austerity on the country as they did.”
Mrs Badenoch went on: “Mr Speaker, it is quite clear that they are going to freeze thresholds.
“We didn’t get a clear answer from them, but this is really important, because in her Budget speech last year, the chancellor said, and I quote, ‘I am keeping every single promise on tax that I made in our manifesto.
“So there will be no extension of the freeze in income tax and national insurance thresholds’.
“Why was freezing thresholds a breach of the manifesto last year, but it isn’t this year?”
The Prime Minister was grilled at PMQs today
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Sir Keir replied: “Every week she comes along and speculates and distorts.”
He added: “They opposed NHS investment and what did we get? Five million extra appointments in the first year of a Labour Government.
“They tried growing the economy with millions on NHS waiting lists, with our schools crumbling and holes in our roof.
“It didn’t work. What do they want to do now? Go back to the same failed experiment.”
Kemi Badenoch pressed Sir Keir over the Chancellor’s ridiculous press conference
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Mrs Badenoch later said: “The Budget chaos is causing real anxiety. People aren’t buying houses, businesses aren’t hiring, and they are cancelling investment decisions.
“Two weeks ago, the Chancellor called a ridiculous press conference to blame everyone else for her having to raise income tax. Then last week, she U-turned on her own U-turn instead.
“We can see they’re planning to freeze income tax thresholds, something she said last year would be a breach of their manifesto.
“They are making it up as they go along. Doesn’t the country deserve better than government by guesswork?”
Sir Keir warned Reform and the Tories would bring back austerity
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Sir Keir replied: “Either we renew our country with Labour or we go back to austerity 2.0 with Reform or the Tories.
“They left waiting lists at record highs, almost a million more children in poverty, and they wrecked our public services.
“She comes here to talk down the country. We’re turning the page, more NHS appointments, free breakfast clubs, free childcare, more homes and better public services.
“That’s what we’re fighting for a Britain built for all.”
Dozens of Labour backbenchers called on the Chancellor to use the Budget to introduce a wealth tax of two per cent on individual assets worth more than £10million.
At least 30 Labour MPs signed a motion tabled by Richard Burgon, who said: “A wealth tax would be a fairer and more popular alternative to any stealth taxes on ordinary people already being pushed to the brink by the cost-of-living crisis.”
In a letter to the Chancellor, Green Party leader Zack Polanski also called for a wealth tax along with changes to capital gains tax to bring it in line with income tax.
It called for wide-ranging measures to cut energy bills, control rents and abolish the two-child benefit cap.
Mr Polanski said: “Our message to Rachel Reeves is simple: cut bills, tax billionaires.”