Prime Minister Sir Keir Starmer is facing intense criticism after refusing to rule out an increase in Income Tax, a move that would break a key Labour manifesto pledge.
Breaking a Pledge
During Prime Minister's Questions, Sir Keir was pressed to repeat his vow not to raise income tax, VAT, or National Insurance. Having done so unequivocally in June, he declined this time, stating instead that the government would "lay out our plans" at the Autumn Budget on November 26.
This shift in position has sparked accusations of a major U-turn. In October, the Prime Minister first hinted he could break the party's flagship tax promise, creating fury among opposition parties and the public.
The Financial Impact on You
New analysis from investment firm AJ Bell provides a clear picture of what a 1p increase across all Income Tax bands would mean for workers.
According to Rachel Vahey, head of public policy at AJ Bell, "Reports suggest that the chancellor is considering an increase in income tax by 1p across the board."
The firm's calculations show the direct cost to taxpayers:
- An individual earning the average UK salary of £35,000 would see their annual tax bill rise from £4,486 to £4,710, an increase of over £200.
- Someone on an annual income of £20,000 would pay £1,560, up from £1,486.
- A person earning £50,000 a year could see their bill jump from £7,486 to £7,860.
Political Fallout and Reaction
The Prime Minister's refusal to recommit to the tax pledge has drawn sharp criticism. When challenged by Tory leader Kemi Badenoch on "what's changed in the past four months," Sir Keir retorted, "They broke the economy. We're fixing it."
Ms Badenoch responded, "Four months ago, the PM ruled out raising these taxes. Today, he won't. Why? Because Labour's high taxes and out-of-control spending have wrecked the economy, and they're coming back for more. Nobody voted for this."
The Liberal Democrats also voiced concern. Daisy Cooper, the party's Treasury spokeswoman, said: "People up and down the country will be incredibly worried by what looks like yet another U-turn from this government. Many households will now be tightening their belts even further fearing more tax hikes to come in the weeks ahead."
All eyes are now on Chancellor Rachel Reeves, who will deliver the highly anticipated Autumn Budget on November 26, where the government's tax plans will be formally unveiled.
