Starmer's political capital fading fast as he nears tax-raising budget

No sooner had the travelling broadcast pack set up outside for our short interviews with the prime minister at a railway depot in Johannesburg, than pouring rain, thunder and lightning began forcing the crews to decamp into a tin roof hanger for the broadcast round.

It seemed like an apt metaphor for the storms Sir Keir Starmer is facing back home.

Seventeen months into office, he has the lowest popularity ratings of any prime minister since records began, there is now open conversation in his party about whether he's right to lead Labour into the next general election, and he is heading into a very tempestuous budget in which he might end up breaking manifesto pledges to working people.

Sir Keir steadfastly refused to recommit to the tax pledges he made in the election in our short interview on Friday.

His operation is not impervious to the peril he is in.

As the prime minister set off on his 45th overseas trip since taking office in July 2024, he and his team were at pains to stress that diplomacy and business done at the G20 in South Africa was all about bringing jobs and investment back home.

On the way over on the plane, Starmer talked about the 200,000 jobs created by G20 countries in the UK as a way of explaining why these trips do matter back home.

And, on landing, the government announced £400m of export investment into the UK on the back of this trip.

To hammer home the point, we interviewed the prime minister - and this matters because those pictures will be beamed into living rooms across the UK - at a train depot in Johannesburg, to highlight that these trains were partly manufactured in Alstom's factory in Derby, East Midlands.

The message here is that the prime minister is focused on trade and business for the UK.

The inclement backdrop is a reminder of the difficult days he has ahead - because it looks like Labour is about to break manifesto commitments on taxes.

A year ago, just days before the October 2024 Budget, the prime minister told me in an interview that he would stick to manifesto commitments: "We made an absolute commitment that their [working people] income tax wouldn't go up, their national insurance wouldn't go up, their VAT wouldn't go up. I said that in the campaign, we're going to keep to those promises."

When I asked him to repeat that promise ahead of the 2025 Budget, he refused 12 times to recommit to those pledges, saying only he would set out measures "in full in just a few days".

He said when he was making decisions for those "people who are struggling with the cost of living, who can't necessarily make ends meet".

One option is likely to be that the government freezes income tax brackets for an extra two years, which would raise around £10bn by dragging those on lower tax bands into higher ones as their wages rise with inflation.

This measure would go against the pledge not to raise taxes on working people.

Read more:
Starmer refuses to rule out manifesto-breaking tax rises in budget
Government borrowing higher than expected
Will energy bills be made cheaper?

Last year, Chancellor Rachel Reeves made a point of saying in her budget that she was not going to extend the threshold freeze (first introduced by the Conservatives because it would "hurt working people".

These were her exact words to parliament in her budget speech last year: "Having considered the issue closely, 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. I say to working people, I will not increase your national insurance, I will not increase your VAT, I will not increase your income tax."

So you can see why this budget is going to be so difficult.

The chancellor carried out the biggest tax-raising budget in a generation last year - £40bn of taxes raised - and is now coming back for more as the UK's productivity growth is downgraded by the fiscal watchdog, and the global headwinds worsen. She has to find around £7bn after U-turns on welfare cuts and the winter fuel allowance.

From the botched welfare reforms, to the winter fuel allowance backlash and reversal before the summer break, to a tumultuous few weeks this autumn, Starmer's political capital is depleting fast as his MPs despair at his operation and his leadership.

Since September, we have seen the resignation of Angela Rayner over her £40,000 underpayment of stamp duty, the sacking of Lord Mandelson over his friendship with convicted sex offender Jeffrey Epstein, Andy Burnham's leadership saga, the face-off between Number 10 and the health secretary and the pitch-rolling of now ditched income tax rises.

Read more:
Starmer calls for investigation into Reform-Russia links
Ex-leader of Reform UK in Wales jailed for accepting Russian bribes

This is not the calm and steady leadership that Starmer promised - and his poll ratings reflect public disappointment in his government.

There is now an open discussion about whether he should lead the party into the next general election, and he is being asked this in interviews.

He told me that he will continue, he will fight the next election and that "he'll be judged at the next election on whether we have been able to make people feel better off".

When I asked him about the chaos of his Number 10, he told me about rolling out free childcare and extending breakfast clubs and freezing prescription charges.

He said: "Given half the change, I want to explain the change we're bringing about, because some of this is really important change we are bringing for the country."

I can sense his frustration, and he was clearly angry about the briefings about his future and criticisms of Wes Streeting as a potential challenger.

"Every minute that we're not talking about the cost of living is a wasted minute," he tells me in response to my litany of difficulties and self-forced errors that have bedevilled his government.

But it is true, as he himself acknowledged at the G7 in Canada, that it is Starmer's job to tell the Labour story better and manage his team.

He is clear in our interview that he wants to press on and change the country, and it was he who won the mandate from the British public to do that.

The prime minister insists this will be a budget where he will take the "right decisions for the country" with NHS improvement and driving down the cost of living, now his guiding principles.

He says he is optimistic about the future of the country. But the public, and his party, have lost all enthusiasm for his premiership, and next week's tax-raising budget can't be anything but loaded with risk.

(c) Sky News 2025: Starmer's political capital fading fast as he nears tax-raising budget