Starmer warns the Cabinet to brace as it is going to be a brutal Budget

The Prime Minister has told his Cabinet to gear up as there will be difficult decisions in the upcoming Autumn Budget.

Sir Keir Starmer has ruled out increased borrowing or spending cuts which only leaves room for tax hikes.

Rachel Reeves has warned that the government “will do what’s necessary to protect families” and public services.

The Chancellor said, “We will do what’s necessary to protect families, public services and hand down secure economy to next generation.

“All have to contribute to that effort. Each must do our bit.”

Reeves Budget could lead to ‘store closures’ and the loss of tens of thousands of jobs

deVere warns Reeves’ borrowing crisis makes pension tax raid ‘almost inevitable’

Reeves’ emergency Downing Street speech underscores tax rises are imminent

Reeves warned VAT hike will affect the ‘elderly, disabled and rural passengers’

FTSE loses £22bn and the pound sinks thanks to the Chancellor

Starmer’s spokesman said the Cabinet was told on Tuesday that the Autumn Budget will be a “very significant moment” because the cost of borrowing is too high and blamed previous government’s for going down the “road of austerity,” this has made the situation worse.

The Prime Minister said that a “fair response” is required to meet the challenges, this will be set out in the Budget on 26 November.

Pensioner groups have expressed their fears that the Chancellor is going to possible break her manifesto pledge to target pensioners and will raise income tax.

Dennis Reed, Director of campaign group Silver Voices, said: “It is clear that the Chancellor is going to break her pledge not to raise income tax, but the pain is likely to be targeted at pensioners.

“This would be seen as a direct and deliberate attack on the living standards of older people, the large majority of whom already pay some income tax.

Alan Lees, Chief Executive of the National Association of Retired Police Officers and a spokesperson for LLA, said, “Older people are not fair game for the Treasury.

“Many have already seen their modest pensions dragged into the tax net because thresholds have been frozen since 2021. Any further rise would be a stealth tax on the very people who built this country.

“The Chancellor talks about fairness and strong foundations, but fairness cannot mean asking pensioners to shoulder the burden for decades of fiscal mismanagement. Older people need stable incomes, secure housing and affordable care – not more uncertainty at every Budget.

Silver Voices Director Dennis Reed said, “It is clear that the Chancellor is going to break her pledge not to raise income tax, but the pain is likely to be targeted at pensioners.

“Egged on by the anti-pensioner think tanks such as the Resolution Foundation, and their man in Government Torsten Bell MP, the Chancellor is seriously considering compensating “working people” for any rises in the basic rate of income tax by cutting national insurance, which of course retired people do not pay. This would be seen as a direct and deliberate attack on the living standards of older people, the large majority of whom already pay some income tax.

“Even those with small additional pensions are now caught in the tax system because of the frozen lower tax threshold. If income tax is to rise it is doubly important that the lower tax threshold is unfrozen, or an age-related personal allowance is reintroduced. An income tax rise targeted at older people, coupled with an extension of the frozen tax thresholds, would be the worst-case scenario for pensioners.”