Labour rule out rises to income tax, national insurance and VAT, say spending plans still fully funded
Darren Jones, Labour’s shadow Treasury minister, has said that Rachel Reeves has “consistently pointing to the fact that we want taxes to come down” and ruled out rises to income tax, national insurance or VAT.
He told viewers of BBC Breakfast:
We’re not raising VAT. We’re not raising income tax. We’re not raising national insurance. The way we talk about these taxes is as taxes on working people because the majority of working people will know that the big taxes they pay are those that are set out in their payslip, in their shopping and bills on a day to day basis. So we have consistently said we want the tax burden on working people to come down, because it’s the highest it has been in 70 years.
Pressed by Naga Munchetty on where the money for spending commitments would come from, Jones said:
So our first six steps – you will have heard us talk about 40,000 additional appointments in the NHS, 6,500 teachers in our schools, some issues around extra police officers, setting up GB energy – these six first steps that we will implement if we win the election are all fully costed
And they’re fully funded by closing a number of tax loopholes. And those loopholes are VAT on private school fees, private equity bonuses, closing some of the loopholes in the non-dom tax system, and then tackling tax avoidance.
And all of those loophole closures, and some investment in the systems at HMRC will generate the billions of pounds that we need to fully fund those six first steps that we set out.
Jones also stressed that Labour had plans to take advantage of opportunities the government had failed on, despite starting from a difficult position if they come to power. He said:
The fiscal inheritance is going to be really hard, it’ll be the worst that any party has inherited since the second world war. So I make no secret of the fact that it will be really tough to begin with. Ee need to get growth back into the economy. More tax receipts to be able to fund public services, which by themselves also need reforming. And there are a whole host of issues that are preventing private sector investment and labour market productivity that the Conservatives fail to grapple with.
Key events
Plaid Cymru are launching their campaign today in Bangor. Ahead of the launch, leader Rhun ap Iorwerth has told ITV that a vote for them is the only way to guarantee fair funding for Wales.
He said:
It is clear that people across Wales have called time on this disastrous and destructive Conservative government. Voting Plaid in constituencies like Ynys Môn is essential in keeping the Tories away from Westminster and out of Wales. At the same time, voting Plaid in Carmarthen and Bangor Aberconwy keeps Labour in check too. Plaid’s positive message of a fairer, more ambitious Wales, shows that we are the only party putting the interests of the nation ahead of party interests.
Political correspondent Eleni Courea reports:
Diane Abbott has accused Labour of carrying out a “cull of leftwingers” after she and others were blocked or dissuaded from standing for the party.
The veteran Labour MP vowed on Wednesday to stay on for “as long as it is possible” after a deal for her to retire from parliament broke down.
The row, which has angered and frustrated some Labour MPs and staff, escalated on Thursday after two leftwing candidates were blocked from standing for the party in the general election.
Faiza Shaheen, who had been Labour’s candidate in Chingford and Woodford Green, told BBC Two’s Newsnight she received an email telling her she had been deselected after the decision was first made public in the Times.
Responding to the news on X, Abbott said: “Appalling. Whose clever idea has it been to have a cull of left wingers?”
Lloyd Russell-Moyle, the MP for Brighton Kemptown, announced he had been suspended from the party on Wednesday afternoon and would not be allowed to stand for Labour at the election.
Read more here: Diane Abbott accuses Labour of ‘leftwing cull’ after two fellow MPs barred from standing
Larry Elliott
Guardian’s economics editor Larry Elliott published this column earlier today, arguing that if Labour wins a 1945-style landslide, it will have no excuse for playing it safe:
Labour’s pitch to voters in 2024 is a lot different from the radical makeover it was offering in 1945. On the one hand, it says that the failures of the Tories in the past 14 years require a change of direction. On the other hand, it doesn’t seem able to sketch out much of a vision of what that change might be, beyond reform of the planning system, a focus on skills and the new deal for workers.
Unions already fear that the last in that list – a package of new employment rights – will be watered down as a result of lobbying by business. Rachel Reeves, the shadow chancellor, says that what Britain needs more than anything now is stability, and in a speech earlier this week she went so far as to claim that – in somewhat Orwellian fashion – “stability is change”.
Stability would make a change, that’s for sure, and Reeves and Keir Starmer might be right in thinking that many voters are small-c conservative, don’t really favour radical policies, and just want to get on with their lives.
Liz Truss’s 49-day stint in Downing Street has made it even more difficult for Labour to deviate from the economic and financial orthodoxy in which an independent Bank of England sets interest rates and an independent Office for Budget Responsibility passes judgment on tax and spending decisions. Not, to be frank, that there was much evidence of the current Labour party wanting to rock the boat anyway.
Read more from Larry Elliott here: If Labour wins a 1945-style landslide, it will have no excuse for playing it safe
Labour’s shadow Treasury minister Darren Jones has denied the party is carrying out a last minute purge of the left as the election approaches. He told viewers of BBC Breakfast:
You know, there are colleagues, friends of mine in the parliamentary Labour party who would define themselves as being on the left of the party, who have been endorsed as candidates and are standing at this election. This isn’t a purge. It’s just the fact that snap election had been called and an accelerated process to resolve outstanding issues must then be followed. And that’s what’s happening this week.
The row over the disciplinary process applied to Diane Abbott, and the rapid and surprising deselection of Faiza Shaheen are among the topics tackled by my colleague Archie Bland in our First Edition newsletter today, which is worth a couple of minutes of your time.
Read more here: Thursday briefing – Diane Abbott, Faiza Shaheen, and how the Labour party is changing
Labour rule out rises to income tax, national insurance and VAT, say spending plans still fully funded
Darren Jones, Labour’s shadow Treasury minister, has said that Rachel Reeves has “consistently pointing to the fact that we want taxes to come down” and ruled out rises to income tax, national insurance or VAT.
He told viewers of BBC Breakfast:
We’re not raising VAT. We’re not raising income tax. We’re not raising national insurance. The way we talk about these taxes is as taxes on working people because the majority of working people will know that the big taxes they pay are those that are set out in their payslip, in their shopping and bills on a day to day basis. So we have consistently said we want the tax burden on working people to come down, because it’s the highest it has been in 70 years.
Pressed by Naga Munchetty on where the money for spending commitments would come from, Jones said:
So our first six steps – you will have heard us talk about 40,000 additional appointments in the NHS, 6,500 teachers in our schools, some issues around extra police officers, setting up GB energy – these six first steps that we will implement if we win the election are all fully costed
And they’re fully funded by closing a number of tax loopholes. And those loopholes are VAT on private school fees, private equity bonuses, closing some of the loopholes in the non-dom tax system, and then tackling tax avoidance.
And all of those loophole closures, and some investment in the systems at HMRC will generate the billions of pounds that we need to fully fund those six first steps that we set out.
Jones also stressed that Labour had plans to take advantage of opportunities the government had failed on, despite starting from a difficult position if they come to power. He said:
The fiscal inheritance is going to be really hard, it’ll be the worst that any party has inherited since the second world war. So I make no secret of the fact that it will be really tough to begin with. Ee need to get growth back into the economy. More tax receipts to be able to fund public services, which by themselves also need reforming. And there are a whole host of issues that are preventing private sector investment and labour market productivity that the Conservatives fail to grapple with.
Labour shadow Treasury minister Darren Jones has also been on the media round talking about tax this morning. He told listeners of the BBC Radio 4 Today programme:
We’ve been very, very clear – even before the election was called – that we want the burden of taxes to come down on working people. That’s why we’ve supported the last two cuts to national insurance and why we’ve been consistent in saying we have no plans, no expectations to increase taxes on working people.
Of course, I would love to do lots of other things that cost lots of money, but I can’t because the Conservatives have crashed the economy, debt has gone through the roof, the cost of the national debt is a huge burden on the Treasury.
Jeremy Hunt pledges a Tory government would not increase income tax, despite keeping planned threshold rises
Jeremy Hunt has been using the morning media round to try to pledge that a future Conservative government would refuse to increase income tax, national insurance, VAT. This is despite the fact that income tax rises are currently baked into funding plans up until 2028.
“Have I been able to cancel out all those tax raises? No”, the chancellor said, when asked about the plans to freeze income tax thresholds each year until that time.
Nick Robinson on the BBC Radio 4 Today put it to Hunt that as a result of the changes 4 million people will pay income tax for the first time, and 3 million will move into paying some income tax at the higher rate of 40%. Hunt said:
Let’s be crystal clear, in the autumn of 2022 I took the very difficult decisions, yes, to increase taxes. And now in my budget, and in the autumn statement last year, I have started to bring them down.
Have I been able to cancel out all those tax rises? No. But I can absolutely undertake that the threshold freeze that we introduced until 2028 will not continue after that. It means that we’re not going to increase it beyond the levels it is currently set at, nor national insurance. In fact, we hope to bring down national insurance.
Hunt was appointed chancellor by Liz Truss in October 2022, in the wake of the dismissal of Kwasi Kwarteng after her disastrous mini-budget.
The chancellor also raised the prospect that a future Labour government would be forced, by contrast, to raise taxes furthers. He said:
In an election campaign, it is legitimate to be concerned about a Labour party that doesn’t seem to be able to make up its mind on these basic issues. Four times this week Keir Starmer and Rachel Reeves had the chance to deny that they were going to increase VAT, and they chose not to until late last night. On national insurance cuts they said they were in favour of it, and now they say they are against further cuts to national insurance
When you have an economy that since 2010 has created more jobs, attracted more investment, and grown faster than nearly any other European economy it is a big risk to hand that to a party that can’t make up its mind on basic issues. Because when the Labour can’t make up their mind, taxes go up, as sure as night follows day.
Welcome and opening summary …
Good morning. The election campaign agenda is about taxation today, with both the Conservatives and Labour promising there will be no rises to income tax, national insurance or VAT. Chancellor Jeremy Hunt has been in difficulty as people point out tax rises are baked in to the system from his previous decisions, while Labour are being pressured on where the extra spending they are promising might be funded. More on that in a moment. Here are your headlines …
Keir Starmer is campaigning in Wales, Sunak will be in the south east of England. Plaid Cymru and the Green party both have campaign launch events this morning.
It is Martin Belam here with you today. I do try to read all your comments, and dip into them if I think I can be helpful, but if you want to get my attention the best way is to email me – [email protected]. It is especially helpful if you have spotted a mistake.
