A senior cabinet minister said he believes the autumn budget will be the “most honest” in years.
Pat McFadden, the chancellor of the Duchy of Lancaster, told Times Radio that the government has “levelled with people” ahead of the budget on Wednesday.
He said: “There’s no point in telling people everything’s absolutely fine when the prison system is in a state of collapse, when NHS waiting lists are at a record high, when we’ve got crumbling schools.
“There’s so much that’s wrong that we’ve got to fix and it’s important to set that out honestly and candidly for the public.”
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He added: “I think we’ll have the most honest budget on Wednesday that we’ve had for some years.”
Chancellor Rachel Reeves will deliver the budget this week in what is one of the most significant financial statements in recent history. Changes expected in the budget include a rise in employer national insurance, of at least one percentage point, and the scrapping of tax exemptions for private schools.
Labour pledged in its manifesto that it would not increase taxes on “working people” and has explicitly ruled out rises in VAT, national insurance and income tax. But the party has been accused of hypocrisy over an expected decision to extend a freeze on income tax thresholds.
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The Conservative Party has said the budget is shaping up to be a “budget of broken promises” on Wednesday. Victoria Atkins, the shadow health secretary, told Sky News: “I am deeply, deeply worried about what we are hearing about the proposals for this budget because it seems that it is shaping up to be a Budget of broken promises.
“The Labour Party didn’t promise much in the general election but they promised two things.
“First of all they wouldn’t fiddle with the fiscal rules, their words, not ours, and secondly that they will not raise National Insurance, VAT and income tax on working people.
“They have announced that they are going to fiddle the fiscal rules… but now we are hearing that the Labour Party don’t actually understand who the people they claim they are trying to protect, who those people are.”
The comments come as Keir Starmer promises to embrace the “harsh light of fiscal reality” at the budget. In a major speech on Monday, the prime minister will warn of “unprecedented” economic challenges and invite the public to judge him on his ability to rise to them.
He will say the budget will “ignore the populist chorus of easy answers” with a series of expected tax hikes.
Referring to the fiscal statements announced by former Labour and Conservative chancellors Gordon Brown and George Osborne, the prime minister will say: “We have to be realistic about where we are as a country. This is not 1997, when the economy was decent but public services were on their knees.
“And it’s not 2010, where public services were strong, but the public finances were weak. These are unprecedented circumstances.
“And that’s before we even get to the long-term challenges ignored for 14 years: an economy riddled with weakness on productivity and investment, a state that needs urgent modernisation to face down the challenge of a volatile world.”
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