This was a holding-pattern PMQs. After last week’s fireworks in the wake of the bizarre briefings put out by No 10 regarding Keir Starmer’s leadership, today was very much a case of pre-Budget muddling through.
On the Tory side, the strategy was to get the Budget attack lines in early. And there was much ammunition, after the frankly unprecedent move by Rachel Reeves to hold a press conference laying the groundwork for a manifesto-breaching rise in income tax, only to signal heavily at the end of last week that such a rise was not necessary after all. Kemi Badenoch had her lines all set. Unfortunately, she fluffed them, asking why Labour was about to become the “the first government in history to float increasing income tax rates only to then U-turn on it all after the actual Budget”. You don’t have to be an avid Westminster watcher to be aware that the Budget is next week and that Badenoch clearly meant to say “before” rather than “after”. Slips like this happen all the time and should not be over-interpreted, but it did crush the Conservative leader’s momentum before she’d properly got going.
It doesn’t neutralise her wider point, however. Badenoch’s five other questions all focused on one simple issue. The Treasury is heavily hinting that instead of increasing income tax, Reeves will freeze tax thresholds next Wednesday. Politicians of both parties tend to think of freezing thresholds as a stealth tax that voters won’t care about – although sit in on a few focus groups and you’ll soon find this fiscal sleight of hand does not go unnoticed.
Badenoch had come armed with the Chancellor’s last Budget speech, in which she declared: “I have come to the conclusion that extending the threshold freeze would hurt working people. It would take more money out of their payslips. I am keeping every single promise on tax that I made in our manifesto. So there will be no extension of the freeze in income tax and National Insurance thresholds beyond the decisions of the previous government.”
It might sound like a fairly dry issue (and after her rocky start Badenoch did not do the best job of hammering it home today), but it’s an attack line that gets to the heart of the challenge Reeves has set herself. By not raising much-needed funds with a sweeping income tax hike, she must find additional revenue by tinkering around the edges of the tax system, which will result in far less money while still running the risk of voters feeling over-taxed and hard done by. If the Tories are able to sell the idea that freezing thresholds isn’t just a sneaky stealth tax but an actual breach of the Labour manifesto – using the Chancellor’s own words to do it – all the more damaging for Labour.
And as a bonus, the change of heart on income tax gave Badenoch the chance for some good lines – “she U-turned on her own U-turn”, “they are making it up as they go along”, “government by guesswork”.
For his part, Starmer did a fair job of batting the attacks away with the usual diatribe about the Tories’ own record on the economy. Today’s inflation figures (down to 3.6 per cent) helped him out slightly. And he had a go at Badenoch for being weak: “On energy policy, she follows Reform. On the European Convention, she follows the man who wants her job. And when her shadow minister said we should deport people lawfully here to achieve cultural coherence, she pretended that it didn’t happen.” The latter comments, made by shadow home affairs minister Katie Lam and slapped down by Badenoch, are an ongoing sore spot for the Tories (given that Lam was describing official party policy that the leader had presumably signed off on). That said, this week the government has announced that refugees already granted asylum in the UK could be deported – a stance that some Labour MPs see as worryingly close to Lam’s.
As for the rest of PMQs, the spiciest moment came courtesy (surprise, surprise) of Lee Anderson. Ostensibly, the Reform MP wanted confirmation that local elections wouldn’t be cancelled, but his question will mainly be remembered for accusing Labour of “dog whistle politics” – a line which triggered laughs across the chamber and heckles that Anderson was “the expert” on such matter – and urging Starmer to “come on, be a man”. Jeremy Corbyn, seated behind the Reform MPs, looked particularly unimpressed. The Prime Minister didn’t even attempt to answer the question, instead reminding the House that last week Nigel Farage had declined to condemn either Sarah Pochin’s racist remarks or the suggestion of a Reform councillor that children in care were “evil”. He also drew attention to today’s news story accusing Farage of racism and anti-Semitism at school. Farage just grinned as usual.
As for the Labour backbenchers – some of whom are already plotting about Starmer’s replacement – there was no overt hostility on show today. But that doesn’t mean the danger has passed. For one thing, Labour MP Clive Lewis chose the moment just before PMQs to announce that he would be prepared to give up his seat to enable Manchester mayor Andy Burnham to return to parliament and challenge Keir Starmer. Fireworks all round.
[Further reading: Meet the bond market vigilantes]
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