No higher taxes on payslips after budget – Labor
Education Secretary Bridget Phillipson said “working people” would not see higher taxes on their pay slips after Wednesday's budget.
At the election, Labor promised not to increase national insurance, income tax or VAT on workers, but ministers have since come under pressure to outline exactly who this would cover.
Appearing with Laura Kuenssberg on Sunday, Phillipson said the manifesto pledge referred to people “whose primary source of income is the income they earn from going to work.”
She avoided saying whether she thought business owners could be considered workers.
Conservative shadow science secretary Andrew Griffith accused Labor of entering government on a “false prospectus that things would be easy”.
“They have essentially lied to the British people about their plans,” he added.
Shortly after coming to power, the Labor government accused the Conservatives of leaving a “£22 billion black hole” in the public finances.
To avoid cutting public spending, Chancellor Rachel Reeves is expected to announce tax increases when she presents the Budget next week.
The government is considering raising taxes on sales of assets, such as stocks and real estate, changing inheritance tax and freezing income tax thresholds.
Continuing the previous government's freeze on tax thresholds would allow more people to move into higher tax brackets and could net the government around £7 billion.
Speaking on Sunday, Phillipson said she could not give specific information on what would be in the budget, but said: “When people look at pay slips, they won't see higher taxes .
“It’s a very clear commitment.”
She added that the government wanted to “break the vicious cycle of increasing taxes on workers and lower growth”.
Asked if, as a minister earning up to £160,000, she was considered a working person, she replied: “My income comes from my work and I will pay any tax asked of me. “
As for whether a small business owner making a profit of £13,000 would be considered a working person, she said she could not give precise details on “who may or may not be affected by the tax measures that may or may not be included in the budget. .
She said she understood people's frustration, but added, “They don't have long to wait.”
She reiterated the government's message that ministers were facing “difficult choices” following the “legacy” left by the previous Conservative government.
On the same show, Griffith accused the government of behaving “at least like the worst form of a dodgy car rental company, conjuring up fine print that never existed.”
The chancellor is also expected to increase the national insurance rate for employers in the Budget and lower the threshold at which employers start paying tax, in a bid to raise £20 billion.
Businesses say the rise would make it harder to recruit staff, hampering the government's aim of boosting growth. This increase could also affect employees if employers choose to reduce salary increases.
As well as giving some hints on what might be in the budget, the government has also provided details of what spending will be announced.
Ministers pledged £1.4 billion to rebuild 50 schools in England a year and £44 million to help foster carers and kinship families, i.e. where a child is raised under the care custody of a friend or family member who is not a parent.
“Bittersweet budget”
Andy Haldane, former Bank of England economist, said: “The distinction between workers and non-workers has no real meaning.
“The truth is that it is very unlikely that over the course of this Parliament we will not almost all pay a little more to close the gap.
“In the land of hard choices, this was always going to be a bittersweet budget.
“The bitterest thing is the tax pill, which will be heavy, and the sweetest thing is the investment.”
Before July's general election, the Institute for Fiscal Studies think tank accused the two main parties of a “conspiracy of silence” over public finances.
IFS director Paul Johnson said “terribly difficult choices” would be needed if the government wanted to stick to a self-imposed rule that debt must fall in proportion to the size of the economy within five years.
