Prime Minister Keir Starmer has refused to rule out extending a freeze on income tax thresholds, widely viewed as a stealth tax, in next week’s Spring Statement.
In a tense exchange during Prime Minister’s Questions, Conservative MP Kemi Badenoch pressed Starmer to give a commitment that he would not extend the freeze, which is due to run until 2028. However, the Prime Minister dodged the question, instead launching a scathing attack on the previous Conservative government’s record.
Badenoch accused Starmer of presiding over an “emergency Budget” next week, after the Chancellor Rachel Reeves previously claimed her first Budget in October was a “once-in-a-generation reset.” The Tory MP argued that the government appears to be “giving with one hand but taking away with the other,” citing the impact on sectors like hospices.
Starmer’s refusal to rule out extending the income tax threshold freeze comes as Labour MPs have been accused of voting for a “health tax” by overturning an amendment designed to introduce exemptions for tax hikes on GP practices, hospices and charities.
The Spring Statement also arrives amid warnings that Labour has been unable to stimulate economic growth in its eight months in power. Last week, the Office for National Statistics revealed the UK economy shrank by 0.1% in January, led mainly by a decline in domestic manufacturing.
The Resolution Foundation, a left-leaning think tank, recently warned Britain was on course for a recession as employers slash jobs and the Chancellor prepares for public spending cuts. The think tank said Reeves was set to break her own fiscal rules and put Britain on course for a £4.4 billion budget deficit.
