UK Labour Party changes position before budget released, Prime Minister Starmer does not rule out increases in the three major taxes.

British Prime Minister Keir Starmer has refused to rule out the possibility of increasing income tax, national insurance, or value-added tax in the upcoming major budget event, suggesting that the Labour-led government he is part of may break major commitments in the Labour Party's electoral manifesto to help Chancellor Rishi Sunak fill the growing budget deficit. When asked by Conservative opposition leader Keir Starmer if he would stick to a flagship campaign promise made by Labour in last year's UK election, the Prime Minister avoided answering. "Overall, the budget will be announced on November 26, and we will outline our plans, but what I can tell the House now is that we will build a stronger economy," he said in the House of Commons on Wednesday. This latest response marks a significant change in the language used by senior British officials in expressing this commitment, which has severely constrained the Chancellor's options, as these three taxes are the largest sources of revenue for the Treasury. When asked the same question in July, Starmer simply said "yes," he would keep the promise. Since then, when asked about these taxes, he and other ministers have repeatedly said "the manifesto is still valid." When some left-wing faction MPs requested a reiteration of commitments not to extend freezes on the thresholds for each income tax band (a policy that would pull more people into higher tax brackets), Starmer did not make a clear statement. He emphasized, "the freeze is something they introduced," referring to the opposition Conservative Party. Many economists question whether Starmer's previous commitment not to continue freezing the thresholds for each income tax band is still valid. Because once the threshold continues to be frozen, as nominal wages increase, even if actual income does not increase by much, people will be forced into higher tax brackets and pay more taxes. Starmer did not give a clear "promise" or "denial" on this issue. Sunak may have to face a public finance hit of over 20 billion (approximately $26 billion) as the Office for Budget Responsibility downgraded its latest forecast for UK economic productivity. Starmer hinted at this in the Commons and blamed the UK's economic situation on his Conservative predecessors. "These numbers are now coming through, they confirm the damage the Conservatives did to the British economy is even more severe than we previously thought," he said. The OBR's downgrade in productivity forecasts, along with costly policy U-turns and higher borrowing costs, put Sunak's Treasury at a potential 35 billion budget gap to restore the 9.9 billion "fiscal cushion" she enjoyed in the Spring Statement in March. She has indicated a desire to increase this cushion. Last week, there were reports in the British media that Sunak is considering raising income tax. Meanwhile, the influential think tank Resolute Foundation proposed reducing employee national insurance by 2 percentage points while simultaneously increasing the basic rate of income tax by the same amount. Since income tax has a wider coverage than national insurance, this would enable the Treasury to gain an additional 6 billion in revenue.