Sir Keir Starmer has insisted Labour “kept to our manifesto” promises despite raising taxes in the budget – as he asked “everybody to contribute”.

The morning after the chancellor announced her record-breaking tax-raising budget, the prime minister told Sky News political editor Beth Rigby the government had “done the least possible we can” to impact people and had “done it in a fair way”.

He said it was “not true” his government has misled the public after promising not to raise taxes again after last year’s budget.

And he refused multiple times to say he had broken his manifesto promise not to raise income tax, national insurance or VAT “on working people”.

“We kept to our manifesto in terms of what we’ve promised,” he said.

“But I accept the challenge that we’ve asked everybody to contribute. I want to be really clear on why we’ve done that,” Sir Keir continued.

“That is because we need to protect our NHS, to make sure that it’s there for people when they need it and their families when they need it.

“Secondly, to make sure we’ve got the money to put into our schools. So every single child can go as far as their talent will take them,” the prime minister added.

“And the third thing is to bear down on the cost of living.”

Politics latest: Reeves says people will pay more

The chancellor announced her budget on Wednesday, just under an hour after the Office for Budget Responsibility (OBR) accidentally uploaded its entire report early, revealing just what would be in the announcement.

She confirmed 43 tax increases to raise an extra £26bn, bringing taxes to an all-time high.

One of the largest tax hikes was the extension to the freeze in income tax thresholds by three years until 2031 to raise £8.3bn more by the end of the decade.

Tax calculator: Find how much more you will pay due to thresholds freeze

But Ms Reeves also insisted this was not a betrayal of Labour’s manifesto promise.

She admitted to Sky News political editor Beth Rigby she is “asking ordinary people to pay a little bit more” but said the manifesto promise was “very specific”.

Read more:
The main budget announcements
Sticking to Labour manifesto pledge costs millions of workers

The chancellor also announced:

• Pensions contributions via salary sacrifice will be capped in 2029 at £2,000 a year before national insurance applies, raising £4.7bn
• The cash ISA allowance will be cut from £20,000 to £12,000 in 2017 for under 65s
• A mansion tax of £2,500 on properties worth more than £2m up to £7,500 for over £5m homes
• Basic and new state pension rates increased by 4.8%
• Pay-per-mile tax for electric vehicles from April 2028
• Tax rates on property savings and dividend income increased by two percentage points
• Two-child benefit cap lifted from April 2026
• Fuel duty frozen until next September
• £150 cuts to average household energy bill from April
• Inheritance tax change to allow transfer of 100% relief allowance to a spouse when one dies.

Over and over again, in the run-up to the election and beyond, the prime minister and the chancellor told voters they would not put up taxes on working people – that their manifesto plans for government were fully costed and, with the tax burden at a 70-year high, they were not in the business of raising more taxes.

On Wednesday the chancellor broke those pledges as she lifted taxes by another £26bn, adding to the £40bn rise in her first budget.

She told working people a year ago she would not extend freezing tax thresholds – a Conservative policy – because it would “hurt working people”.

Budget latest: ‘It can only lead to the death of us at the general election’

On Wednesday she ripped up that pledge, as she extended the threshold freeze for three years, dragging 800,000 workers into tax and another million into the higher tax band to raise £8.3bn.

Rachel Reeves said it was a Labour budget and she’s right.

In the first 17 months of this government, Labour have raised tens of billions in taxes, while reversing on welfare reform – the U-turn on the winter fuel allowance and disability benefits has cost £6.6bn.

Ms Reeves even lifted the two-child benefit cap on Wednesday, at a cost of £3bn, despite the prime minister making a point of not putting that pledge in the manifesto as part of the “hard choices” this government would make to try to bear down on the tax burden for ordinary people. The OBR predicts one in four people would be caught by the 40% higher rate of tax by the end of this parliament.

Those higher taxes were necessary for two reasons and aimed at two audiences – the markets and the Labour Party.

For the former, the tax rises help the chancellor meet her fiscal rules, which requires the day-to-day spending budget to be in a surplus by 2029-30.

Before this budget, her headroom was just £9.9bn, which made her vulnerable to external shocks, rises in the cost of borrowing or lower tax takes. Now she has built her buffer to £22bn, which has pleased the markets and should mean investors begin to charge Britain less to borrow.

As for the latter, this was also the chancellor raising taxes to pay for spending and it pleased her backbenchers – when I saw some on the PM’s team going into Downing Street in the early evening, they looked pretty pleased.

I can see why: amid all the talk of leadership challenge, this was a budget that helped buy some time.

“This is a budget for self-preservation, not for the country,” remarked one cabinet minister to me this week.

You can see why: ducking welfare reform, lifting the two-child benefit cap – these are decisions a year-and-a-half into government that Downing Street has been forced into by a mutinous bunch of MPs.

👉Listen to Politics at Sam and Anne’s on your podcast app👈

With a majority of 400 MPs, you might expect the PM and his chancellor to take the tough decisions and be on the front foot. Instead they find themselves just trying to survive, preserve their administration and try to lead from a defensive crouch.

When I asked the chancellor about breaking manifesto promises to raise taxes on working people, she argued the pledge explicitly involved rates of income tax (despite her pledge not to extend the threshold freeze in the last budget because it “hurt working people”).

Read more:
Budget 2025: The key points at a glance
Why Labour MPs may like Reeves’s budget

Trying to argue it is not a technical breach – the Institute of Fiscal Studies disagreed – rather than taking it on and explaining those decisions to the country says a lot about the mindset of this administration.

One of the main questions that struck me reflecting on this budget is accountability to the voters.

Labour in opposition, and then in government, didn’t tell anyone they might do this, and actually went further than that – explicitly saying they wouldn’t. They were asked, again and again during the election, for tax honesty. The prime minister told me that he’d fund public spending through growth and had “no plans” to raise taxes on working people.

Those people have been let down. Labour voters are predominantly middle earners and higher earning, educated middle classes – and it is these people who are the ones who will be hit by these tax rises that have been driven to pay for welfare spending rather than that much mooted black hole (tax receipts were much better than expected).

This budget is also back-loaded – a spend-now-pay-later budget, as the IFS put it, with tax rises coming a year before the election. Perhaps Rachel Reeves is hoping again something might turn up – her downgraded growth forecasts suggests it won’t.

This budget does probably buy the prime minister and his chancellor more time. But as for credibility, that might not be recoverable. This administration was meant to change the country. Many will be looking at the tax rises and thinking it’s the same old Labour.

Britain’s top military chiefs held a “very difficult” meeting this week over how to fund plans to rebuild the armed forces amid fears of further cuts, defence sources have said.

The Ministry of Defence (MoD) played down a report in the Spectator magazine that the top brass, led by Air Chief Marshal Sir Rich Knighton, the chief of the defence staff, planned to write an extraordinary joint letter to John Healey, the defence secretary, to explain that his defence review published in June cannot be delivered without more cash.

“There is not a letter,” an MoD source said, adding that such a communication was not expected to be received either.

However, other sources from within the army, navy and air force confirmed to Sky News there is growing concern among the chiefs about a gap between the promises being made by Sir Keir Starmer’s government to fix the UK’s hollowed-out armed forces and the reality of the size of the defence budget, which is currently not seen as growing fast enough.

That means either billions of additional pounds must be found more quickly, or ambitions to modernise the armed forces might need to be curbed despite warnings of mounting threats from Russia and China and pressure from Donald Trump on the UK and the rest of Europe to spend more on their own defences.

“The facts remain that the SDR (Strategic Defence Review) shot for the stars, but we only have fuel for the moon,” one source said.

A second source agreed.

By way of example, they said General Sir Roly Walker, the head of the army, was all too aware of the financial challenges his service in particular was facing, especially given plans to regrow the force to 76,000 soldiers from 72,500 in the next parliament.

The defence review set out the requirement for more troops, but such a move would need sufficient money to recruit, train and equip them.

There is also a goal to expand reserve forces, which similarly costs money.

Air Chief Marshal Knighton and General Walker were joined in the meeting on Tuesday at the Ministry of Defence by the other service heads, General Sir Gwyn Jenkins, the First Sea Lord, and Air Chief Marshal Harv Smyth, the Chief of the Air Staff.

Read more:
Britain’s new fighting vehicle injured troops and cost billions

General Sir Jim Hockenhull, the commander of Cyber and Special Operations Command, was also likely to have been present.

It is a regular fortnightly gathering of chiefs.

This week they discussed the content of an upcoming plan on defence investment that is expected to be published next month – a timeline that is understood to have been delayed because of friction over how to make the money match the ambition.

“I know there was a very difficult meeting,” a third source said.

“Shoehorning the SDR into the DIP (Defence Investment Plan) as inflation, foreign exchange movement, re-costing, in-year delivery drama and unforeseen additional costs arise was always going to be hard,” the source said.

“The amount of money needed to make the thing balance is both small compared to other parts of the public sector, but also not available from this government. It’s still a matter of choices, not overall affordability.”

The source pointed to what Germany and Poland are doing on defence, with both countries significantly and rapidly ramping up defence spending and expanding their militaries.

By contrast, the UK will only inch up its core defence budget to 2.5% of GDP from around 2.3% by 2027, with plans to hit a new NATO target of 3.5% not expected to be reached until 2035.

👉 Click here to listen to The Wargame on your podcast app 👈

Responding to the Spectator claim, an MOD spokesperson said: “All of defence is firmly behind delivery of our transformative Strategic Defence Review (SDR), which set out a deliverable and affordable plan to meet the challenges, threats, and opportunities of the 21st century.

“The plan is backed by the largest sustained increase in defence spending since the end of the Cold War – hitting 2.6% of GDP by 2027.”

The 2.6% figure cited by the spokesperson also includes intelligence spending on top of core defence spending.