London Daily

Focus on the big picture.
Thursday, Sep 11, 2025

Keir Starmer under pressure to back plans for corporation tax rise

Keir Starmer under pressure to back plans for corporation tax rise

Labour leader has faced backlash after saying he would oppose any new tax on business in budget

Starmer’s stance has prompted some unease within his shadow cabinet.

Keir Starmer is under pressure to back future rises in corporation tax after a backlash when the Labour leader said he would oppose any new tax on business in next week’s budget.

Treasury officials are believed to be looking at increasing the tax on company profits from the current rate of 19% to up to 25% as the government tries to recoup some of the massive debts incurred during the pandemic, though the rise may be delayed until later in the parliament.

During prime minister’s questions on Wednesday, Starmer said: “Now is not the time for tax rises on families and businesses.”

The shadow business secretary, Ed Miliband, has previously backed moves to increase UK corporation tax – which is the fourth lowest among the 37 member countries in the Organisation for Economic Co-operation and Development (OECD).

Labour appeared to soften its position on Wednesday night, suggesting the party would back a steady minimal increase later in the parliament. A source said: “Let’s look at what the chancellor brings forward: if he’s talking about corporation tax going up gradually across the parliament to an OECD average, that’s one thing, but we don’t think there should be tax rises right now where the focus should be supporting business investment and growth.”

The stance prompted some unease within the shadow cabinet. One Labour frontbencher said they believed it would change, saying: “Not totally convinced … This is a pretty progressive tax policy that I don’t know if we should be opposing. I’m not sure the position today will be the one we end up with.”

But another shadow cabinet source said they thought the expected rise in the budget was “kite flying”. Labour’s line was that tax rises were wrong “right now”, the source said, with any rise in corporation tax likely to come into force later in the parliament.

Three other shadow cabinet sources confirmed to the Guardian that they backed the approach to oppose a corporation tax hike next week. One said: “We’ve said for months we will oppose any rise in this budget and it’s consistent with what we’ve been saying that tax rises now will stifle our recovery. The Tories are turning their backs on business and under new leadership there is a new relationship with business.” A source close to Miliband said he backed Starmer’s caution.

On Wednesday Starmer pushed the prime minister to act on council tax rises and businesses rates relief, saying: “Now is not the time for tax rises on families and businesses.” The exchange was likely aimed to drive a wedge between Boris Johnson and his MPs, many of whom are likely to oppose a rise in corporation tax.

The shadow Treasury minister James Murray, appearing on the BBC on Wednesday afternoon, said the party would not back any tax rises. “We’re in the middle of an economic crisis, and this is not the time to do it,” he said. “If you have a country where businesses are closing, where people don’t have money to spend in the economy and where you haven’t got investment going into public services and infrastructure, that is no way to get the country back on its feet.”

A number of Labour MPs expressed alarm at the position, including backers of Starmer. Stella Creasy said Labour should always back ways to make the system fairer.

“A fairer tax system was our ambition before the pandemic, and will be critical to our recovery after as we pick up the pieces,” she said. “We’ve seen several major corporations make substantial profits as a direct consequence of the pandemic – the same companies who will also benefit from the impact of government support getting those who have been hit by redundancy and debt back on their feet.

“But for that to happen those schemes need to be funded now to stop any more families and small businesses from going under. It’s right that we look at our corporation tax rates and capital gains taxes and ask how and when those with the broadest shoulders can contribute a bit more to the task of rebuilding our nation.”

Another former minister said the party should be actively talking up the creation of a windfall tax for businesses that had profited from the pandemic. “Increasing corporation tax does not affect hard-up firms,” they said. “It’s economically illiterate.”

Starmer’s comments prompted more explicit criticism from the party’s left. A spokesman for the grassroots group Momentum, which championed the former leader Jeremy Corbyn and has been critical of Starmer, said: “During the pandemic big corporations like Amazon have cashed in while working people struggle to get by. Labour should support both raising corporation tax and a special Covid-19 windfall tax for sectors that have made super profits.”

Richard Burgon, the former shadow justice secretary who is secretary of the Socialist Campaign Group of MPs, said: “The question facing all politicians now is: who is going to pay for this crisis? And if we don’t have an answer for that, then we are in a position where Labour doesn’t have an answer to one of the biggest questions facing us. The prime minister rejected my call for a windfall tax. But Labour has to make clear that the super-rich corporations who have increased profits pay their fair share to bringing the end to this crisis.”

Newsletter

Related Articles

0:00
0:00
Close
ChatGPT CEO signals policy to alert authorities over suicidal youth after teen’s death
The British legal mafia hit back: Banksy mural of judge beating protester is scrubbed from London court
Surpassing Musk: Larry Ellison becomes the richest man in the world
Embarrassment for Starmer: He fired the ambassador photographed on Epstein’s 'pedophile island'
Manhunt after 'skilled sniper' shot Charlie Kirk. Footage: Suspect running on rooftop during panic
Effective Protest Results: Nepal’s Prime Minister Resigns as Youth-Led Unrest Shakes the Nation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
King Charles and Prince Harry Share First In-Person Moment in 19 Months
Starmer Establishes Economic ‘Budget Board’ to Centralise Policy and Rebuild Business Trust
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Brazilian police say ex-President Bolsonaro had planned to flee to Argentina seeking asylum
Trinidad Leader Applauds U.S. Naval Strike and Advocates Forceful Action Against Traffickers
Kim Jong Un Oversees Final Test of New High-Thrust Solid-Fuel Rocket Engine
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Supreme Court temporarily allows Trump to pause billions in foreign aid
Charlie Sheen says his father, Martin Sheen, turned him in to the police: 'The greatest betrayal possible'
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
Pig Heads Left Outside Multiple Paris Mosques in Outrage-Inducing Acts
Nvidia’s ‘Wow’ Factor Is Fading. The AI chip giant used to beat Wall Street expectations for earnings by a substantial margin. That trajectory is coming down to earth.
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
On the Anniversary of Queen Elizabeth’s Death: Prince Harry Returns to Britain
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Murdoch Family Finalises $3.3 Billion Succession Pact, Ensuring Eldest Son’s Leadership
Big Oil Slashes Jobs and Investments Amid Prolonged Low Crude Prices
Court Staff Cover Up Banksy Image of Judge Beating a Protester
Social Media Access Curtailed in Turkey After CHP Calls for Rallies Following Police Blockade of Istanbul Headquarters
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
Elon Musk Poised to Become First Trillionaire Under Ambitious Tesla Pay Plan
France, at an Impasse, Heads Toward Another Government Collapse
Burning the Minister’s House Helped Protesters to Win Justice: Prabowo Fires Finance Minister in Wake of Indonesia Protests
Brazil Braces for Fallout from Bolsonaro Trial by corrupted judge
The Country That Got Too Rich? Public Spending Dominates Norway Election
Nearly 40 Years Later: Nike Changes the Legendary Slogan Just Do It
Generations Born After 1939 Unlikely to Reach Age One Hundred, New Study Finds
End to a four-year manhunt in New Zealand: the father who abducted his children to the forests was killed, the three siblings were found
Germany Suspends Debt Rules, Funnels €500 Billion Toward Military and Proxy War Strategy
EU Prepares for War
BMW Eyes Growth in China with New All‑Electric Neue Klasse Lineup
Trump Threatens Retaliatory Tariffs After EU Imposes €2.95 Billion Fine on Google
Tesla Board Proposes Unprecedented One-Trillion-Dollar Performance Package for Elon Musk
US Justice Department Launches Criminal Mortgage-Fraud Probe into Federal Reserve Governor Lisa Cook
Escalating Drug Trafficking and Violence in Latin America: A Growing Crisis
US and Taiwanese Defence Officials Held Secret Talks in Alaska
Report: Secret SEAL Team 6 Mission in North Korea Ordered by Trump in 2019 Ended in Failure
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Florida Murder Case: The Adelson Family, the Killing of Dan Markel, and the Trial of Donna Adelson
×