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Prime Minister Keir Starmer faced a bruising session during Prime Minister's Questions today, refusing to unequivocally rule out further tax rises and confirming a significant U-turn on controversial winter fuel payment cuts. The heated exchange with Tory leader Kemi Badenoch illuminated deep divisions within the Labour cabinet and growing anxieties over the nation's economic trajectory.
The fiery confrontation was ignited by revelations that Deputy Prime Minister Angela Rayner had vigorously advocated for a £4 billion tax hike on wealthier individuals in the run-up to this year's Spring Statement. Rayner's proposals, which reportedly included ending inheritance tax relief for AIM shares, imposing higher taxes on dividends, and reinstating the pensions lifetime allowance, have fueled speculation that further tax increases could be on the cards for the Autumn Budget.
When directly pressed by Badenoch to rule out more tax rises this year, Starmer conspicuously sidestepped the question, instead launching an attack on the Conservatives' economic track record. Badenoch swiftly accused the Prime Minister of obfuscation and "refus[ing] to rule out new tax rises."
The Conservative leader then escalated her attack, alleging "open warfare" within the Labour cabinet. "The Deputy Prime Minister is on manoeuvres," Badenoch asserted, accusing Starmer of having "lost control of the economy, he’s lost control of his cabinet." Pointing to Rayner, Badenoch continued, "She knew exactly what she was doing when she briefed that into the papers. She’s demanded eight new tax rises, as if we haven’t suffered enough. People out there are struggling, businesses are struggling … we cannot have more tax rises."
Starmer dismissed the accusations of internal division, stating, "The Deputy Prime Minister, working with the Chancellor, [is] putting 1.5 million new homes, reforming our planning system, putting £7 billion into our economy."
Badenoch, however, remained undeterred, retorting, "His cabinet is open warfare, the Deputy Prime Minister [is] clearly calling the shots … we’re heading for new tax rises, we know inflation is up." Starmer responded by asserting that it is Badenoch who has "lost control of all of her party. They are sliding into oblivion. They will have to trade on their past … because that’s all they’ve got." The debate also touched upon the recent spike in inflation to 3.5 per cent, which Badenoch directly attributed to the government's policies.
Winter Fuel Payment U-turn Confirmed
In a separate but equally significant development, Starmer confirmed his government's decision to relax the eligibility rules for winter fuel payments to pensioners. This move marks a notable U-turn following a strong backlash against the initial decision to means-test the benefit, which had limited its reach.
Speaking at PMQs, Starmer stated that more pensioners would now be eligible for the payment. The Guardian had earlier revealed that ministers were considering an increase to the £11,500 threshold, above which pensioners were no longer eligible for the allowance.
When asked by Labour MP Sarah Owen about support for pensioners, Starmer acknowledged that his government had been compelled to stabilize the economy with "tough decisions." These included the initial decision to remove the payment of up to £300 from 10 million pensioners within weeks of taking office – a decision that has now been reversed in part due to public and parliamentary pressure.
