By james art 
Sir Keir Starmer has issued a grim warning over the Budget later this week, which is expected to include record tax rises.
The Prime Minister used a big speech in Birmingham on Monday to pave the way for “difficult decisions” on Wednesday when Rachel Reeves presents her first Budget.
With his government already under siege over its economic plans, Sir Keir sought to clarify what he meant by “working people” whose taxes he has promised to protect.
The prime minister mentioned “working people” 24 times in his speech, trying to deflect criticism of his own vague definition by saying: “they know who they are”.
There was a promise in his party’s manifesto not to increase income tax, national insurance or VAT, but this now appears to be under threat, with employers’ national insurance rates already expected to rise.
There are also expected to be tax attacks on inheritance and capital gains as the chancellor tries to close the £40bn gap between spending plans and government revenue.
The prime minister tried to blame the tax hikes in a bleak budget on the legacy left to his Tory government. Critics have noted that huge increases in public sector wages, especially for doctors and machinists, have made things much worse.
But Sir Keir has defended the impending tax hike.
He said “better days are ahead” and “everyone can wake up on Thursday and see that a new future, a better future, is being built.”
The Prime Minister said: “Loans will stimulate long-term growth. Tax increases will prevent austerity and restore public services. We choose to protect working people. We choose to get the NHS back on its feet. We choose to fix the foundations, reject the decline and rebuild our country with investment.”
He added: “It’s long past time for politicians in this country to get straight with you about the trade-offs this country faces, to stop insulting your intelligence with the chicanery of easy answers.”
“Working people know that hard choices are needed. They survived the Liz Truss episode. They survived the cost of living crisis.
“So they know that the things they want from us – protecting their standard of living, building our nation, fixing our public services – they know that can only be achieved together with economic stability.” There are no shortcuts.”
The prime minister has also abandoned some early measures he hopes will ease the pain.
These include a £240m package for advice to help people on long-term benefits get back into work.
He also said bus fares would be capped at £3 by 2025, up from the current £2.
The chancellor is now expected to increase employers’ national insurance contributions by 2 per cent, despite pledging not to increase national insurance in the party’s manifesto.
There are also expected to be increases in inheritance and capital gains tax. Ms Reeves promised not to increase “taxes on working people”, including income tax, employee National Insurance contributions or VAT.
In his speech, Sir Keir promised the budget would “ignore the populist chorus of easy answers” amid a raft of expected tax rises, including an increase in Employer’s National Insurance by at least one percentage point.
Referring to statements made by New Labour’s Gordon Brown and austerity-era Conservative chancellor George Osborne, Sir Keir said: “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 when public services were strong but 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 in terms of productivity and investment, a country in urgent need of modernization to meet the challenge of an unstable world .”
The prime minister said he would not offer the UK’s problems as an “excuse”, adding: “Politics is always a choice. It’s time to choose a clear path and embrace the harsh light of fiscal reality so we can rally behind a credible, long-term plan.”