Is Labour Preparing Brits For A Tax Shock This Autumn?

Are our taxes about to go up?

That’s a question Brits will be hearing again and again ahead of Labour’s autumn Budget, where the government sets out its spending and tax plans for the year ahead.

Very rarely do ministers admit in any significant detail exactly what they have planned for the fiscal event – but early signs suggest that a tax hike just might be looming.

The occupants of 10 and 11 Downing Street are stuck between a rock and a hard place when it comes to the country’s finances right now.

Keir Starmer and Rachel Reeves promised not to increase taxes on “working people” in the run-up to the general election last year.

While the exact definition of that phrase split public opinion, Labour said it means not raising income tax, employee national insurance or VAT.

Of course, that wording came back to haunt the government at last year’s Budget when they revealed they were hiking employers’ national insurance contributions – and critics swiftly pointed out that employers are “working people”, too.

Then the National Institute of Economic and Social Research (NIESR) think tank today predicted that Reeves will need to raise taxes to close a government spending gap on course to reach more than £40 billion.

This is due to unexpectedly sluggish economic growth – GDP grew by 0.7% in the first quarter of 2025 but contracted by 0.1% in May – and higher-than-expected inflation – at 3.6% in June.

To make matters worse, when Labour made its 2024 tax promises, it also pledged to oversee a period of significant economic growth which… has not really happened.

So perhaps it is no surprise the NIESR claimed Reeves is facing “an impossible trilemma” – sticking to her fiscal rules while fulfilling her spending commitments and upholding her manifesto pledge not to raise taxes for working people.

Tellingly, the prime minister refused to reiterate his commitment not to increase “working people” taxes on Wednesday.

He told reporters he did “not recognise” the NIESR’s figures, adding: “But the Budget won’t be until later in the year – that’s when we’ll have the forecast and set out our plans.”

He also steered the conversation away from taxes, telling reporters: “What’s really important is that I’m very clear about our focus, which will be on living standards and making sure that people feel better-off, partly because more money is coming into their pocket in the first place through better wages, and partly because we’re bearing down on costs like mortgages and other costs to everyday families.”

Tory donor and former deputy chair of the party, Lord Ashcroft, took that to mean there will be “another U-turn” on Labour’s promises coming soon.

But, increasing taxes on “working people” is not the only option for the government.

Those on the Labour left are calling for a wealth tax, although cabinet minister Jonathan Reynolds called the idea “daft” just last month.

Meanwhile, professor Stephen Millard, the NIESR’s deputy director for macroeconomics, told the BBC Radio 4′s Today programme that Reeves could look at reforming the council tax system.

“Houses have not been revalued since 1991. The system is ripe for a complete reform,” he said. “The question there is whether reforming the council tax system, getting it right, would necessarily raise any additional money.

“An alternative is to replace the whole thing with a land value tax, which is much fairer and which potentially could actually raise a significant amount of money.”

But just what will Labour choose to do to fix our unsteady finances? Right now, it seems like it is anybody’s guess – including Labour’s.

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Blow To Labour As Reform Voters Prefer Jeremy Corbyn To Keir Starmer On Almost Every Metric

Reform UK voters generally prefer Jeremy Corbyn to Keir Starmer, a surprising new poll has found.

As first reported by Novara Media, a survey of 2,000 UK adults – conducted by Merlin Strategy over the weekend – showed Reform voters believe the former Labour leader has better qualities than the current prime minister.

The poll showed 65% of respondents think Corbyn was more authentic, 67% said he was for working people, 57% think he was hardworking, 64% believe he’s honest and 54% say he’s intelligent.

A further 70% said they believe Corbyn makes radical decisions, 64% say he is principled, 69% say he represents change, 62% say he’s strong and 59% say he’s trustworthy.

And, crucially, 61% said they believe the Islington North MP understands “people like me”.

Starmer won on only one metric – he’s seen as better on the world stage than Corbyn.

However, the poll did not show whether or not this would push Farage supporters to actually vote for Corbyn’s new party.

Still, the research will be a real blow to the Labour government, considering it has moved away from hard-left policies touted by figures like Corbyn, in favour of winning back Reform voters.

The right-wing populist party has soared in popularity over the last year and now consistently leads in opinion polls by a healthy margin – despite having just four MPs.

So the government has been trying to win back that support.

Labour’s political director Claire Reynolds even told the party’s MPs in May that Reform UK voters are “our people”, but they’re just “pissed off” with the government right now.

It’s well-known that Starmer’s increasingly hardline anti-immigration policies have failed to cut through to Farage’s growing body of supporters – as Reform UK currently have a seven-point lead on Labour.

However, it will rub salt in the wound to know that Corbyn, Starmer’s predecessor who was expelled from the party over a row related to antisemitism, is more respected than the prime minister.

Starmer has tried to present it as a major strength that he moved Labour away from Corbyn’s policies after the party’s disastrous performance in the 2019 general election.

But, the Islington North MP is now setting up his own left-wing party – which is yet to be named – and already has 500,000 sign-ups expressing interest.

Zarah Sultana, a suspended Labour MP who quit the party to join Corbyn’s new group, told Novara Media that Starmer’s “spent years chasing Reform voters, echoing their rhetoric, even mimicking Enoch Powell. And for what? They still prefer Jeremy Corbyn.”

Corbyn himself told the outlet: “The Labour government is here to appease Reform. We are here to defeat Reform.”

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How Starmer Told His Cabinet To Stop Beating Themselves Up – Then Cracked The Whip On Rebel MPs

Keir Starmer’s speechwriters experienced mixed emotions at last week’s Cabinet away day.

They had prepared a carefully-crafted message for the prime minister to deliver to his senior ministers as he welcomed them to Chequers.

But the PM surprised – and impressed – them by not using the words they had prepared for him, choosing instead to make a “freeforming”, 20-minute speech setting out his thoughts on Labour’s first year in power and where he believes his government needs to go next.

“It was very good,” said one of those present. “He spoke from the heart about whose side we’re on. You could feel in the room that it went down well.”

Lucy Powell, leader of the House of Commons, told Starmer: “Your speechwriters are great, but it’s better when you speak from the heart.”

The PM told the assembled gathering that while Labour had undoubtedly made mistakes since last year’s landslide election win, they had also done things like introducing free school meals, breakfast clubs and 4.5 million NHS appointments.

“He said lots of people in Westminster won’t appreciate how those policies make a massive difference to ordinary people across the country,” said one eyewitness.

“After a year in government, he said he realised that the Tories get 96% of things wrong and focus on the 4% of things they get right, whereas Labour gets 96% of things right but agonise over the 4% we get wrong.

We have a tendency to beat ourselves up about the things we get wrong, but he said we need to focus on the things we do that are improving the lives of the people who put us here.”

Starmer spoke about his own upbringing, about his brother who died on Boxing Day last year and his sister who is a carer.

It makes me feel incredibly privileged to do this job, but I never lose sight of the fact that we are here to make life better for ordinary people,” the PM said.

The overall message was that while the first year in office had been necessarily tough, Labour is now entering the next phase of its time in government.

“We’ve done a lot and we need to shout about that more, but there’s lots more to do before the next election,” said one No.10 source.

“It was about building towards the message that we’ll have at party conference in September. We were elected on a promise of change, we did the tough stuff in the first year and now is the time to set out the positive change people are going to feel over the next four years.”

Although Downing Street officials deny the two things were linked, removing the whip from four Labour MPs on Wednesday afternoon also felt like an attempt by Starmer to draw a line under his first year in power and look to the future.

Many Labour MPs were stunned by the swift brutality of it, but others were delighted to see perennial rebels like Brian Leishman and Neil Duncan-Jordan made an example of.

“There are lots of loyal MPs who were absolutely spitting feathers at the behaviour of some of the members of the Parliamentary Labour Party (PLP) , so there was quite a lot of pressure from them for us to do something,” said one insider.

Others, however, were baffled by the move, with one Labour source bemoaning the “randomness, the odd timing and the lack of any accompanying strategy” behind the decision.

Some point the finger at Claire Reynolds, Downing Street’s political director, who encouraged the government whips to threaten rebel MPs with suspension if they voted against the welfare cuts bill last week.

Despite Starmer gutting the legislation of many of its key measures in order to placate the rebels, 47 of them still trooped through the No lobbies.

One No.10 insider said of the disciplinary action: “We couldn’t do it during the welfare stuff, we had to wait for the dust to settle on that.

“But if you are actively organising against the government then there has to be consequences.”

But a Labour source said: “Presumably they internally have been saying ‘we need to take this action, otherwise we look ridiculous at not being able to follow through on the threats we made before the vote’.

“So a bad strategy for persuading the PLP ends up with a bad strategy for disciplining the PLP.

“If Claire Reynolds is making threats to people and demanding they be sacked to fulfil her threats, I’m not sure any of that is being instigated by [No.10 chief of staff] Morgan McSweeney, Keir or [chief whip] Alan Campbell, even if they’re going along with it.”

An already-tumultuous week then saw Diane Abbott lose the Labour whip for a second time after she doubled down on the comments about anti-semitism which led to her original suspension from the party.

It was a timely reminder for Starmer that for all his talk about a brighter future, the present has the unfortunate habit of delivering a sharp dose of political reality.

As MPs prepare to leave Westminster for the summer next week, the prime minister will hope that his second year in power is better than his first.

But all the evidence of the past 12 month suggests he and his cabinet should buckle up for another bumpy ride.

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Diane Abbott Suspended By Labour For A Second Time Over Anti-Semitism Comments

Diane Abbott has been suspended by Labour for a second time amid fresh allegations of anti-semitism.

The veteran MP appeared to double down on previous comments she made about Jewish, Irish and Traveller people not experiencing the same type of racism as black people, which saw her lose the party whip two years ago.

In an interview with the Radio 4′s Reflections programme, Abbott said she did not look back on that incident with regret.

She said: “Clearly, there must be a difference between racism which is about colour and other types of racism because you can see a Traveller or a Jewish person walking down the street, you don’t know.

“I just think that it’s silly to try and claim that racism which is about skin colour is the same as other types of racism. I don’t know why people would say that.”

In a statement, a Labour Party spokesperson said: “Diane Abbott has been administratively suspended from the Labour Party, pending an investigation. We cannot comment further while this investigation is ongoing.”

It means Abbott will not have the Labour whip and will have to sit as an independent MP.

The initial row erupted over a letter Abbott sent to The Observer in 2023, in which she said: “They undoubtedly experience prejudice. This is similar to racism and the two words are often used as if they are interchangeable.

“It is true that many types of white people with points of difference, such as redheads, can experience this prejudice.

“But they are not all their lives subject to racism. In pre-civil rights America, Irish people, Jewish people and Travellers were not required to sit at the back of the bus.

“In apartheid South Africa, these groups were allowed to vote. And at the height of slavery, there were no white-seeming people manacled on the slave ships.”

She later claimed the letter had been sent to the newspaper in error and apologised “unreservedly” for any “anguish” they had caused.

The former shadow home secretary was eventually given back the Labour whip before last year’s general election – but has been a regular critic of Keir Starmer’s leadership.

Abbott, who is the MP for Hackney North and Stoke Newington, was criticised by the Jewish Labour Movement.

In a post on X, they said: “Anti-semitism is anti-Jewish racism. It targets Jews regardless of how they look, and many of our community are visibly Jewish and suffer racism for it.

“We are disappointed that Diane Abbott MP has doubled down on comments she previously appeared to apologise for, and are pleased to hear that Labour are looking into them.”

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We are disappointed that Diane Abbott MP has doubled down on comments she previously appeared to apologise for, and are pleased to hear that Labour are looking into them.

2/2

— Jewish Labour Movement (@JewishLabour) July 17, 2025

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We are disappointed that Diane Abbott MP has doubled down on comments she previously appeared to apologise for, and are pleased to hear that Labour are looking into them.

2/2

— Jewish Labour Movement (@JewishLabour) July 17, 2025

The row comes just a day after four Labour MPs lost the whip for persistent breaches of party discipline.

Neil Duncan-Jordan, Brian Leishman, Chris Hinchliff and Rachael Maskell were all suspended by government chief whip Alan Campbell.

All four voted against the government’s flagship welfare bill last week, but it is understood they have been disciplined for “actively organising against the government” over several months.

Seven Labour MPs also lost the whip last July after voting to scrap the two-child benefit cap, although four of them later had it restored.

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