The Prime Minister has said that the Government is “going to keep our manifesto pledges”, amid speculation that a raft of tax rises could be coming in this month’s Budget.
Sir Keir Starmer told reporters in Berlin that he was “not going to pre-empt the individual measures” that will come in Rachel Reeves’ fiscal statement, but said they would keep to the promises made during the election.
Reports have suggested that numerous tax rises are being considered for fiscal events at the end of this month.
Changes to inheritance tax, fuel duty, stamp duty, and a levy on e-cigarettes are among the measures said to be up for consideration by Rachel Reeves in her October 30 fiscal announcement, according to reports across the media on Friday morning.
There has also been reporting around a potential increase to employer national insurance contributions and inheritance tax among others.
Labour’s general election manifesto from earlier this year said that the party “will not increase taxes on working people” and promised to not raise national insurance, income tax and VAT.
Asked about whether reported tax changes under consideration would keep to their promise of not increasing taxes for working people, Sir Keir told a press conference in Berlin: “We are going to keep our manifesto pledges.”
He added: “I’m not going to pre-empt the individual measures that will be outlined by the Chancellor in due course.”
He went on: “This is going to be a Budget that will fix the foundations and rebuild our country.”
The future has never held so much potential. It now falls on all of us to seize it – together. pic.twitter.com/WWhmejn2Wg
— Rachel Reeves (@RachelReevesMP) October 14, 2024
When asked a further question about potential inheritance tax rises, the Prime Minister said “you’ll just have to wait until the Chancellor lays that out in full, but the structure if you like, the framework, is going to be to fix the foundations and to rebuild our country.”
Multiple changes to inheritance tax are being considered by ministers, according to reports by the BBC, though it is not certain how many people will end up paying more money, nor how much more they might pay.
The levy does not affect the vast majority of the public at the moment, with only 4% of deaths resulting in an inheritance tax charge as the threshold for the 40% charge is an estate above £325,000.
The Chancellor is also expected to honour the previous Tory government’s plans to make around £3 billion of cuts to welfare by reforming work capability rules in the Budget.
Work and pensions minister Alison McGovern did not steer away from the reports when asked about them by broadcasters on Friday morning, but said Labour was making its “own reforms” to the benefit system.
Ms Reeves is also said to be considering bringing a stamp duty discount introduced by the Tories to an end, the Times newspaper reports, which is expected to raise £1.8 billion a year by 2029.
Other reports suggest a tax on vapes could be raised, and that fuel duty could be hiked for the first time in 14 years.
Ms Reeves is looking to raise up to £40 billion from tax hikes and spending cuts in the Budget as the Government seeks to avoid a return to austerity.
As part of the reported welfare cut proposals, it is understood Ms Reeves will commit to the plan to save £3 billion over four years, but Work and Pensions Secretary Liz Kendall will decide how the system will be changed in order to achieve this.
Ms McGovern, a minister in the Department for Work and Pensions, suggested Labour was making its own reforms rather than sticking to previous Tory commitments.
She told Times Radio: “We will not go ahead with the Tory plan because that was theirs. We will need to make savings like all departments, but we will bring forward our own reforms.”
Ms Reeves meanwhile convened the first meeting of the British infrastructure taskforce on Friday, in a bid to get more private investment into major infrastructure projects.
Finance chiefs from HSBC, Lloyds and M&G were among those expected to be involved in the Chancellor’s talks at the first meeting.
Ms Reeves said their expertise will be “invaluable in the weeks and months ahead” as the Government pursues its “number one mission to grow the economy and create jobs”.
Chief Secretary to the Treasury Darren Jones said the taskforce would aim to end “the cycle of underinvestment that has plagued our infrastructure systems for over a decade.”
