Row Over Income Tax Threshold Freeze Sparks PMQs Fireworks
Keir Starmer refused to rule out extending the controversial income tax threshold freeze in a heated showdown with Tory deputy leader Kemi Badenoch at Prime Minister’s Questions on November 19, 2025. Badenoch slammed Labour’s upcoming Budget as “the first to unravel before it’s even been delivered,” accusing the Prime Minister of risking another stealth tax hike that could push more than a million workers into higher tax brackets.
Badenoch launched a fierce attack, citing Chancellor Rachel Reeves’ March pledge not to extend the freeze – a move Labour once said would “hurt working people.” “The Chancellor’s cluelessness is damaging the economy now,” she said. “Can the PM confirm he won’t break yet another manifesto promise by keeping income tax thresholds frozen?”
Starmer Plays His Cards Close to His Chest
But Starmer sidestepped the question, insisting all Budget details would be revealed on November 26. “The Budget is one week today and we will lay out our plans,” the PM said, adding that Labour would not “inflict austerity” like the Tories.
The freeze, introduced by the Conservatives in 2021 and set to run until 2028, creates “fiscal drag” – meaning rising wages get swallowed up by higher tax rates as thresholds stay fixed. Extending it beyond 2028 could rake in £8 billion a year but hit over 10 million taxpayers, with minimum wage earners seeing bills rise by £137 annually and some couples paying up to £1,300 more.
Tory Blasts Highlight Labour’s Fiscal Chaos
Badenoch pressed Starmer on Labour’s apparent U-turn. “Why was freezing thresholds a manifesto breach last year but not this year?” she demanded, referring to Reeves’ earlier vow to protect working people from tax rises.
Reeves sat smiling through the clash as speculation swirled about stealth tax moves behind the scenes. Earlier in 2025, Starmer praised Reeves for guiding the UK to outpace G7 growth, but critics warn momentum has since slowed.
The clash came after Reeves dropped plans to hike income tax rates earlier this month – a move that would have raised up to £20 billion but shattered manifesto promises. Badenoch accused Labour of “making it up as they go along” and presiding over a “shambolic” Budget process that risks public trust.
Pressure Mounts as Budget Day Nears
Conservative MPs cheered Badenoch’s attack, which racked up thousands of social media views. Reform UK leader Nigel Farage backed the Tories’ economic criticism, creating rare right-wing unity against Labour.
With the Office for Budget Responsibility expected to report a £30 billion fiscal black hole, Chancellor Reeves faces tough choices to plug gaps without breaking manifestos. Starmer’s silence on potential stealth taxes and wealth levies adds fuel to the fire.
The PMQs clash revealed Labour’s bigger challenge – turning a strong election win into stable, trusted economic leadership. As the November 26 Budget looms, Starmer’s unwillingness to dismiss stealth tax tactics guarantees political heat will only rise.
