SIR Keir Starmer today ruled out tax hikes to offset the economic meltdown triggered by Donald Trump’s tariffs – but opened the door to more borrowing and spending cuts.
The PM promised not to increase the three main revenue-raisers of Income Tax, National Insurance or VAT – insisting: “The first lever can’t be more taxes.”;
Stock markets the US President will spark a global trade war with his blizzard of import levies.
It also and wipe out the £10billion headroom accrued in the Spring Statement.
Economists have , make deeper spending cuts or break his “fiscal rules”; to increase borrowing.
Asked if he would stick with his pledge not to hike the three main taxes, the PM said: “We made that commitment in the manifesto and we were absolutely clear about going into the budget and the spring statement, and that is a commitment we've made, and a commitment that we will keep, because the first lever can't be more taxes.
“My strong belief is that we have to driver our economy, create the conditions for investment, which we have done, there's been record investment coming into our economy.”;
He added in the West Midlands: “I'm still strongly of the view that the challenge we face is how to grow our economy, not just the sort tax and spend levers.”
Labour’s election vow that surging GDP will fund their spending plans has been shot to pieces by a sluggish growth forecast.
Chancellor Rachel Reeves jacked up taxes by £40billion at the last Budget, including £20billion of National Insurance hikes on employers that kicked in this week.
And Whitehall is bracing for spending cuts further to last month’s benefit squeeze.
Ms Reeves has previously said her fiscal rules not to borrow to fund day-to-day spending are “non-negotiable”.
But quizzed today if they will be in place for the next five years, Sir Keir did not categorically commit to keeping them.
Ms Reeves already bent her fiscal rules last year allowing her to borrow more to fund spending plans.
Downing Street is still holding out hope for that will do away with tariffs.
The PM’s spokesman today said negotiations were at an “advanced stage”;.
