Sir Keir Starmer returns to growing storm over rumoured budget tax rises

Is the prime minister declaring war on middle Britain in his definition of a working person and did he mislead the public in his manifesto by giving no inkling of the tens of tens of billions of pounds of tax rises happening in Wednesday’s budget?

Sir Keir Starmer’s emphatic answer to both of these questions at his closing news conference at the Commonwealth Heads of Government meeting (Chogm) in Samoa was “no”.

But the fact they were asked gives you a sense of what he’s flying back to this weekend because the £40bn gap in the public finances that Treasury sources are whispering about will have to be filled by big tax rises and spending cuts.

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The backlash brimming over who is going to bear the brunt comes back to the first principles of what Sir Keir told me in our leaders’ debate interview, which was that he had “no plans” to raise taxes beyond what was in the manifesto.

Back then, Labour was committed to tax rises of about £8bn, based on a tax hike on private equity, the oil and gas industry and VAT on private school fees.

Those measures would pay for more teachers in schools and doctors’ appointments in the NHS.

Now the prime minister and his chancellor, Rachel Reeves, are gearing up to raise tens of billions with a 2p hike in national insurance contributions for employers, which could raise about £20bn, and possible increases in inheritance tax and capital gains tax.

Labour will of course blame the rises on its Conservative inheritance, but voters and businesses hit by tax rises next week will be forgiven for feeling misled.

For his part, the prime minister was clear in the closing news conference at the Commonwealth summit that his campaign pledge not to increase taxes on working people in terms of income tax, national insurance and VAT would be kept.

But the huge tax increases elsewhere will inevitably raise questions about whether the prime minister, who talks a lot about rebuilding trust in politics wasn’t being straight as he fought for election victory.

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He would argue that it was only after Labour lifted the bonnet on the public finances in power that he saw the extent of the damage.

But will it wash with the public given that the Conservatives ran a campaign warning of the big tax rises under Labour that are now surely on the way?

Sir Keir keeps talking about difficult decisions as he returns to what is set to be a defining week as he and his chancellor seek to land a difficult budget.

The pair will be hoping that the chancellor’s decision to change her debt rules to release up to £50bn of capital to invest in Britain’s infrastructure will help tell the story of rebuilding Britain and cushion the blow of tax rises.

The prime minister had a bit of a dry run of that narrative in Samoa when he explained the hard decisions to come.

He told reporters “we are fixing the foundations, which is tough, but we are doing it on purpose because I believe very strongly that if we fix the foundations, take the tough decisions, scrub it down, make sure that our economy is on a very stable footing, which is what it will do, then that is the best platform for rebuilding the country.

“And for me, that’s the characteristics of that and what I want to be judged on is one, have we made people better off? Do they feel better off under a Labour government because we fix the foundations?”

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The problem he has in the more immediate future is that many people out there who are not hugely wealthy, who define themselves as “working people”, fear they are about to become worse off under a Starmer government.

Businesses, which Labour says it needs to rebuild the economy, are bracing for a huge new levy just months after being promised that national insurance would not rise under a Labour government.

Landlords who have properties and those who hold shares worry that this is a Labour prime minister who is coming for them after the election while not flagging he might beforehand.

His gamble is to administer the pain early in the hope of delivering real improvement in public services and living standards by the time voters go back to the polls.

In the meantime, the rocky atmosphere of his first 100 days is likely to extend into the budget and beyond.