Sir Keir Starmer has left the possibility of a VAT tax increase open ahead of the upcoming Budget, amid a projected £30 billion financial shortfall this autumn, reports BritPanorama.
During an interview with the BBC, the Prime Minister did not dismiss the potential for higher VAT rates, stating that the “manifesto stands.” His comments drew immediate criticism from the Conservative Party, who expressed concerns that this stance may waver ahead of the Budget scheduled for the end of November.
When pressed on whether he could categorically rule out a VAT rise, Starmer asserted, “We put that manifesto before the electorate. We got elected and that manifesto stands.” He avoided detailing possible Budget contents, emphasizing the lengthy timeframe until the announcement.
Starmer remarked on the Sunday With Laura Kuenssberg programme, “I’m not going to go through the details of what may be in the Budget. Obviously, it’s two months away and no prime minister and no chancellor would ever sit here and indicate two months out what may or may not be in the Budget.”
The Labour Party had campaigned on a pledge not to raise taxes on working individuals, specifically naming income tax, VAT, and national insurance as protected areas. Currently, the standard VAT rate in the UK remains at 20 per cent.
Starmer faced further probing regarding the manifesto’s longevity and applicability at future dates, reiterating, “We put that manifesto before the electorate, we got elected, and that manifesto stands.” He firmly maintained that he will not disclose Budget specifics until closer to the date.
Conservative leader Kemi Badenoch criticized Starmer, stating, “Keir Starmer just failed three times to rule out a hike in VAT. Claiming that ‘the manifesto stands’ is not the same as saying ‘no rise in VAT.’ The PM must rule out hiking VAT immediately, or working people will fear another Labour tax bombshell in the budget.”
One potential strategy for Chancellor Rachel Reeves to address the £30 billion shortfall could involve extending income tax thresholds, which might pull more citizens into higher tax brackets while subsequently adding approximately £10 billion to Treasury revenues.
