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People won’t face higher taxes on their pay slips after Budget, says Education Secretary | Political news
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People won’t face higher taxes on their pay slips after Budget, says Education Secretary | Political news

People will not face higher taxes on their pay slips after the Budget, a minister has said, refusing to know what measures could be included in the £40 billion revenue raise.

Education Secretary Bridget Phillipson has repeatedly said she cannot speculate on how Chancellor Rachel Reeves intends to plug the black hole in the country’s finances, which is estimated to be more than double of what we previously thought.

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Labor said in its manifesto that it would not increase national insurance, income tax or VAT on “workers” – but it is unclear exactly who that means.

Ms Phillipson told Sky News it was someone “whose main income comes from going to work every day”.

However, she refused to say whether it was someone who does this and also has savings, tell Sunday morning with Trevor Phillips: “You are once again asking me to speculate on matters that concern the Chancellor.”

She added: “We said in our manifesto that we would not increase VAT, national insurance or workers’ income tax. We will stick to that. And in the payslips they will see afterwards the budget, they will not face higher taxes.

Government sources were later forced to clarify that the promise was valid until the next election, after the Education Secretary seemed to fumble his lines on this.

There was further confusion over remarks she made on the BBC’s Sunday With Laura Kuenssberg, when she refused to say whether a small business owner with an average net profit of around £13,000 was considered ‘working’ by the government.

She admitted it was “frustrating” not to be able to talk about the Budget, but added that “it’s not my job, it’s the Chancellor’s job.”

The Budget – a special on Sky News

Although ministers have remained tight-lipped about next week’s Budget event, it is believed that capital gains tax, fuel duty and inheritance tax are some of the levers Ms Reeves could pull .

In recent weeks, ministers have said their commitment not to increase national insurance only applies to workers, fueling speculation that the employers’ share of the levy could also increase.

It appeared that the government is seeking to close a £40 billion deficit, more than double the £22 billion black hole they previously warned about and used to justify cutting winter fuel payments.

Paul Johnson, director of the Institute for Fiscal Studies, told Sky News that if this were the case, Wednesday’s tax event would be “certainly one of the biggest fiscal tax rises in history” .

The Conservatives accused Labor of misleading the public during the election campaign with their economic plans.

Gareth Davies, shadow exchequer secretary, said: “Labour are breaking their word. They are trying to mislead the public – but it won’t work.”

He accused Labor of breaking its manifesto promises not only by raising taxes but also by “manipulating the figures to blow up borrowing”, despite pledging not to change their budget rules.

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UK’s black hole is ‘genuinely big’

Learn more:
“Workers” and Labor get mixed up with messages
Sir Keir Starmer says those who own assets are ‘not working people’

This comes after Ms Reeves confirmed that it will change its definition of debt to enable it to borrow more to invest.

Speaking to Sky News earlier this week, she said that self-imposed budget rule below which borrowing should fall by the fifth year economic forecasts will be redefined based on the current measure of public sector net debt.

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Former Bank of England governor considers budget

Former Bank of England Governor Mervyn King warned the move could lead to the people’s grandchildren carrying the burden of the national debt in years to come, and that Ms Reeves should “demonstrate how the “Increase in short-term borrowing will be limited in the future.” , for example by increasing taxes.

He advised Ms Reeves to be “open and honest” about what increased borrowing would bring, because “it is the merits of the spending that will determine whether or not people are prepared to accept higher taxes in order to see the benefits.