Keir Starmer said he would defend tax rises “all day long” as he set out the broad outlines of the new government’s first Budget.
Speaking in Birmingham ahead of the Budget, the Prime Minister said politicians needed to be honest with the public about the difficult decisions facing the government.
“The time is long overdue for politicians in this country to level with you honestly about the trade-offs this country faces, to stop insulting your intelligence with the chicanery of easy answers,” he said.
“Nobody wants higher taxes, just like nobody wants public spending cuts. But we have to be realistic about where we are as a country. This is not 1997 when the economy was decent but public services were on their knees. And it is not 2010 where public services were strong but the public finances were weak,” he continued.
“I will defend our tough decisions all day long. It is the right thing for our country and it is the only way to get the investment that we need”.
Starmer’s speech comes just days before Rachel Reeves will deliver her first Budget as Chancellor.
Reeves is likely to announce tax rises worth £35bn as she seeks to put the public finances on firmer ground. Reports indicate that the government will hike employers’ national insurance and extend the freeze on income tax thresholds alongside a series of other smaller measures.
Starmer tried to justify the tax hikes, claiming they would “prevent austerity and rebuild public services.”
But the looming hikes have prompted accusations that the government is breaking its manifesto commitment to not raise taxes on ‘working people’.
Ministers have struggled to define exactly what they mean by the pledge. Starmer tried to sidestep the debate by claiming that they “know exactly who they are”.
Alongside increasing taxes, the government will also reform the fiscal rules to allow for tens of billions of extra investment over the course of the parliament.
Starmer argued that both the tax rises and the increase in investment were vital for “fixing the foundations” of the economy.
“I have been really clear that we have to move to a situation where we invest in the future of this country. Where we invest to ensure that we get the better jobs that we need, we have the infrastructure that we need,” he said.
“And so part of what we will say on Wednesday is, first, how we’re going to fix the foundations and deal with the problem we’ve inherited, but secondly, how then we rebuild the country.”