Sir Keir Starmer will say in a speech ahead of Wednesday’s announcement that the Budget will be “severely tested by fiscal realities” but “better days are ahead”.
The Prime Minister is expected to warn of “unprecedented” economic challenges but says the government will “meet them up” as Labor prepares its first budget in almost 15 years.
The government is expected to announce a series of expected tax increases, including National Insurance (NIC) rates paid by employers rise Some claim this breaches Labour’s manifesto pledge not to increase taxes on “working people”.
The Conservatives accused Sir Keir’s government of “breaking its promises”.
In a speech in the West Midlands on Monday, Sir Keir will argue that the country faces “unprecedented” challenges with weak public finances and collapsed public services.
He will commit to facing what he calls “tough decisions.”
Speculation is growing over the tax rise plans the chancellor will announce on Wednesday, with Rachel Reeves claiming there is a £22bn “hole” in the public finances left behind by the previous government.
Last week, Reeves suggested that businesses would face increases in national insurance by suggesting that Labour’s election pledge would not increase “working people’s” contributions linked to employees, rather than the amount paid by employers.
In addition to employer’s national insurance, the freeze on income tax thresholds can also be extended.
This means more people are “dragged” to pay tax or pay higher rates, and wages rise above thresholds.
The government is also considering increasing taxes on sales of assets such as stocks and real estate and changing its own rules for measuring debt to free up money for spending on infrastructure projects.
