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Sir keir starmer It said the budget “asks everyone to contribute” to protecting public services and helping people struggling with the cost of living.
Rachel Reeves’ budget kept Britain The tax burden is set to rise to record highs as he hikes taxes by £26 billion after weak economic forecasts left holes in his previous spending plans.
Prime Minister argued that his Government We “did as little as possible” and “did it the right way” to impress people.
The increase is also needed to pay for increased welfare spending, with the abolition of the two-child benefit cap costing £3 billion a year by 2029/30.
Sir Keir said he was “not going to apologise” for lifting 450,000 children out of poverty, as he hit back at claims the announcement was designed to appease restive people. Labor MP.
Asked whether he was scrapping the two-child limit for universal credit to strengthen his position, he told Sky News: “It’s impossible to argue that this is a position that has been adopted in the last few weeks. It’s a long-standing ambition of mine.”
“I am proud to have a Prime Minister who has done more on child poverty than any other Prime Minister has ever done.”
He also pointed to the “huge impact” the “disgusting” Tory policy is having on the health of hundreds of thousands of children.
“I will not apologize for lifting half a million children out of poverty,” Sir Keir said.
After abandoning plans for a manifesto-defying income tax rise, Chancellor Ms Reeves opted for a series of smaller tax rises to pay for government spending and create a bigger buffer against its borrowing rules.
These include a new pay-per-mile tax for electric vehicles, an increased tax on online betting and a so-called “mansion tax” on homes worth more than £2 million.
But it continued to face accusations of breaking Labour’s election promise not to raise taxes on working people following its decision to keep the tax threshold frozen until 2030/31 and impose national insurance on some pension contributions.
The cap cap will result in 780,000 more basic-rate, 920,000 more higher-rate, and 4,000 more additional-rate income tax payers in 2029/30 as earnings increase over time.
If people’s earnings exceed £12,570, they have to pay 20% income tax, with a 40% rate capped at £50,271 and a 45% rate capped at £125,140.
Sir Keir admitted that “everyone” – including the working people whose protection Labor had promised – had been asked to contribute.
Asked by the BBC whether the Labor Party had broken its manifesto commitment not to raise headline taxes on working people, the Prime Minister replied: “We made a number of commitments in our manifesto which we have kept, but I accept that… We have asked everyone to contribute.
“Let me tell your viewers exactly why that is: to make sure we can protect our NHS, which needs to be there for them and their families when they need it. Everyone understands that.
“We want to make sure we’ve got schools that are fit for the future so that every child can get there according to their talents, and I definitely wanted to try and keep the cost of living down, because that’s going to be the most important thing to most of your audience.”
Amid repeated questions about whether Labour’s manifesto pledge not to raise income tax, national insurance or VAT on working people was breached, Sir Keir said: “Anybody will accept that there have been a number of adverse circumstances over the last 12 months which were not expected”.
The Office for Budget Responsibility reduced the growth rate from 1.9% to 1.4% in 2026, from 1.8% to 1.5% in 2027, from 1.7% to 1.5% in 2028, and from 1.8% to 1.5% in 2029.
But Sir Keir pointed to the budget watchdog raising GDP growth to 1.5% this year, an increase from its earlier forecast of 1%.
He said, “1% growth was predicted in the year 2025, the data came yesterday, it is 1.5%. This is 50% more than the estimate. This is quite high.”
He said his government had rejected the forecast in 2025 and “I am committed to doing so in the coming years.”
Earlier, Ms Reeves had insisted that taxes were being kept “to the absolute minimum on ordinary working people”, even as an influential think tank said increasing tax rates for low- to moderate-income earners would have been better than keeping their tax rates frozen.
The Resolution Foundation said raising all rates by 1p would be less expensive than freezing the cap for anyone earning less than £35,000.
The blunt-spoken Chancellor also defended her position, saying: “You’re not going to write my obituary today”, as she denied she was raising workers’ taxes to fund the growing welfare bill.
But Tory shadow chancellor Sir Mel Stride said Labour’s “very bad” measures would “benefit 25,000 more people as a direct result of making them more attractive”.