Keir Starmer refuses to rule out additional tax rises in main announcement subsequent month

Keir Starmer has failed to rule out further tax rises in next month’s Spring Statement.

The Prime Minister signalled that the worst may be over for Brits, saying the “big decisions on tax” were taken in the Budget in October. But he declined to stamp out speculation that the Chancellor Rachel Reeves could be forced to hike taxes to stay within her tight fiscal rules.

Economists have warned that the Chancellor has almost no room for manoeuvre after worse than expected economic growth, a rise in inflation and recent turmoil in the markets. The Office for Budget Responsibility (OBR) will deliver its verdict on the public finances on March 26, followed by a statement from Ms Reeves.

The Chancellor previously said she wants to do just one big fiscal update a year – a Budget in the autumn – to offer more certainty to the public. But speculation has been mounting that she could be forced to impose tax hikes and cuts to public spending if the forecasts are gloomy.

Speaking to reporters on the way to Washington, Mr Starmer left the door open to tax hikes or cuts to public spending. Asked if he was happy for her to raise taxes or cut spending to meet her fiscal rules, he said: “Well we are at the early stages of that, and obviously I am not going to get ahead of myself until we have made decisions.

“But as I have said before, in terms of the big decisions on tax obviously the Budget was the place that we took those decisions – but as ever, going into a statement I am not going to say in advance what we might do and what we might not do.

“But let me not set hares running, the big decisions were in the Budget of last year and that’s the way we are approaching this spring statement.”