Portrait of Keir Starmer
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Keir Starmer on Taxes

Pragmatic tax adjuster (strong) Position evolved

TL;DR

Keir Starmer's government has raised taxes by freezing thresholds to fund key public services while aiming for fairness.

Key Points

  • The budget raised taxes by £26bn, notably by freezing income tax and national insurance thresholds for an additional three years.

  • He defended the tax rises by linking them directly to the necessity of protecting the NHS and improving schools.

  • There were specific tax increases announced on betting firms, landlords, and those with income primarily from assets rather than employment.

Summary

Keir Starmer, as Prime Minister, has overseen a budget that raised taxes by £26bn, primarily through freezing income tax and national insurance thresholds for an extra three years. He has defended this by arguing that the country needs to protect the NHS and fund schools, while bearing down on the cost of living, asserting that the Labour government has “kept to our manifesto” despite the tax increases. The government faced immediate claims of breaking pre-election promises not to raise taxes on working people, to which he conceded that the budget "asked everybody to contribute" but insisted it was done in a fair way, minimizing the impact on ordinary people.

This approach also involved increasing taxes on specific areas, such as betting firms, landlords, and high-value property owners, while claiming to protect those who primarily earn from work. The Finance Minister further admitted that working people would pay a bit more, though kept to an absolute minimum by those targeted revenue-raising measures. This reflects an evolution in stated policy, moving from pre-election pledges to a more pragmatic fiscal reality necessitated by economic conditions and the need to fund public spending priorities, which is expected to bring tax receipts to their highest levels since the 1940s.

Frequently Asked Questions

Keir Starmer's government has taken the position of raising taxes to fund public services, primarily by freezing tax thresholds. He argues this is necessary for protecting key services like the NHS and schools. This contrasts with previous election promises against raising taxes on working people.

Yes, the government has implemented tax increases via threshold freezes despite pre-election pledges not to raise taxes on working people. He now concedes that the budget "asked everybody to contribute" to meet fiscal needs, signaling a pragmatic shift.

The government introduced broad tax increases via a multi-year freeze on income tax and National Insurance thresholds. Additionally, it targeted specific groups by increasing taxes on betting firms, landlords, and those earning income from assets.