Starmer refuses to rule out freezing income tax thresholds in Budget – live updates

The Independent’s political correspondent Caitlin Doherty reports:

Labor MP Clive Lewis has indicated he would be willing to give up his seat for Greater Manchester Mayor Andy Burnham.

Speaking to the BBC’s Politics Live programme, the Norwich South MP suggested it could be a case of “country before party”.

Asked directly whether he would give up his seat, Mr Lewis said: “That’s a question I’m asking myself and of course I need to consult my wife and family as well. But you know what? If I sit here and say ‘country before party, party before personal ambition’ then I have to say yes yes.”

Asked if he would give up his seat for Mr Burnham, he said: “Yes, I would.”

Labour’s main manifesto when it came to power last year was that it would not increase national insurance (NI), income tax or VAT.

Instead, a two-year freeze on tax thresholds until 2030 now appears to be a possible option.

Since 2021 the income tax personal allowance has been frozen at £12,570.

Rather than increasing with inflation or average earnings as in previous years, this allowance and all rates will be frozen.

The effect of this is what economists call ‘fiscal drift’, where more people are drawn into higher tax brackets as average earnings rise, but the thresholds remain the same.

Reform UK MP Lee Anderson accused the government of peddling its “own brand of dog whistle politics” as he asked the prime minister a question in the House of Commons.

There was laughter in the chamber after the comment, and another lawmaker called Anderson an “expert” on such matters.

There was even more laughter when he said his party was “going about its day job” in Reform-led councils.

He said: “And the prime minister may nod, he may support these gullible backbenchers, but the question is: will he ensure that all the elections canceled this year and the local elections proposed for next year are held in May 2026?”

He added: “Go ahead, be a man.”

Sir Keir Starmer replied: “I didn’t realize you were so good at stand-up comedy.”

Kemi Badenoch accused Labor MPs of “speculating” on their party’s budget as she clashed with the Prime Minister over inflation.

The Conservative leader told MPs: “He’s talking about speculation. The only person who has been speculating every day for the last three months is his own government.”

Ms Badenoch, the former Treasury secretary, also stated that “Inflation has almost doubled since they took office” and continued: “It has fallen a little bit because she wants a round of applause. I will remind her that food inflation has increased by 4.9 per cent, making the lives of all people there unbearable.”

“But let’s get back to thresholds because this is important; when the Chancellor (Rachel Reeves) promised that thresholds would not be frozen, it was not a thoughtless comment.

“He said this in his budget speech to Parliament. It was a conscious statement of Government policy, so if he makes such a clear promise, how can the public trust anything he says next week?”

David Maddox, political editor of The Independent, reports:

Kemi Badenoch got the success she wanted at the PMQs after Sir Keir Starmer ruled out a freeze on income tax thresholds.

The Conservatives’ statements were ready to go.

A Conservative Party spokesman said: “The Prime Minister has failed to repeat the promise made by the Chancellor in last year’s budget to end the freeze on income tax thresholds.”

Rachel Reeves said any freeze on thresholds would be a breach of the Labor manifesto and would ‘hurt working people’.

“If it does not end the budget freeze next week it will be yet another unfulfilled promise from a government that has lost the trust of the British people.”

They noted that in last year’s budget speech the chancellor said: “Having looked at this issue closely, I have concluded that freezing the threshold would harm working people. It would result in more money being spent from payrolls. I am keeping every promise I made on tax in our manifesto.”

David Maddox, political editor of The Independent, reports:

Liberal Democrat leader Ed Davey is also using this latest opportunity to seek proposals for a budget measure with a sudden push for a gambling tax.

The proposal was actually supported by former Labor prime minister Gordon Brown as a means of raising revenue.

However, Sir Ed learned that Sky Bet was planning to move to Malta to avoid corporation tax in the UK.

Linking this to issues around people taking their own lives, he has now joined the bandwagon for a tax on gambling winnings that chancellor Rachel Reeves is expected to introduce.

If he does this, he will undoubtedly declare victory.

The Independent’s political correspondent Caitlin Doherty reports:

The Prime Minister told MPs they would have to wait until next week to find out what was in the Budget.

Answering questions from Conservative leader Kemi Badenoch, he also ruled out freezing income tax thresholds.

Sir Keir said: “The budget is a week today and we will set out our plans.

“I said what we would do in terms of protecting the NHS and public services.

“What we won’t do is impose austerity on the country like they did. What we won’t do is create a borrowing spree like Liz Truss did.”

The Tory leader had a string of clear goals for Labour’s chaotic plans to put the ball in the net.

However, the most important thing was that the budget made a “u-turn” on the income tax issue before the budget was even delivered.

As has been well said before, the most important issue in politics is the “stupidity of the economy”.

Ms Badenoch did her best to focus on the economy, with the Prime Minister saying Liz Truss was getting weaker by the week.

More importantly is Rachel Reeves’s statement that freezing income tax thresholds would be a breach of her manifesto promise not to increase income tax.

That will be the line of attack after Ms. Reeves does what seems inevitable from next week.

The Prime Minister said next week’s budget will “tackle inequality”.

It comes after Corbynite Labor MP Jon Trickett called on him to “end economic injustice”.

In his response, the Labor leader told him: “He is right to raise this issue, we are committed to tackling inequality… The Chancellor will deliver a budget based on Labor values.”