Good morning. The government raises more than £1 trillion in tax every year, and more than half of that money comes from just three sources: income tax, national insurance and VAT. The Conservatives and Labour have both promised not to raise the rates of any of those taxes (although, with VAT, Labour was initially reluctant to give a cast-iron pledge, implying Rachel Reeves, the shadow chancellor, wanted, at least a bit, to keep her options open.)
But there are plenty of other taxes available to a chancellor, and it seems the Conservative party now plans to spend the remaining four weeks until polling day challenging Labour to rule out raising any of them. Today Jeremy Hunt, the chancellor, has written an article for the Daily Telegraph in which he promises that his party won’t increase stamp duty, that it will continue to ensure main homes are exempt from capital gains tax, and that it won’t hold a council tax revaluation, or increase the number of council tax bands. The final promise is particular significant because the current council tax arrangements for England are egregiously unfair, and mainstream economists argue (eg here and here) the case for reform is overwhelming.
Hunt says:
That is why today we are announcing the family home tax guarantee.
This guarantee is a commitment not to increase the number of council tax bands, undertake an expensive council tax revaluation, or cut council tax discounts. It is a commitment to maintain private residence relief, so that people’s main homes are protected from capital gains tax. And it is a commitment not to increase the rate or level of stamp duty.
I am throwing down the gauntlet to Rachel Reeves and Sir Keir Starmer to join us in this pledge. This isn’t party political point-scoring. I actually want to see the Labour party say they will put families first and higher taxes second.
When politicians declare they are not engaged in “party political point-scoring”, that’s often a clear sign that are and Hunt’s article suggests that the Tories have decided that tax is the strongest card they’ve got to play in the campaign. Normally parties are reluctant to rule out too many tax increases in advance of an election because they want to retain room for manoeuvre if economic circumstances get tricky. But if a party is expecting to lose, it feels less constrained when it comes to making promises.
So far Hunt does not seem to have succeeded in tempting Labour to play his game. Last night a party spokersperson just said:
We will not be raising taxes on working people … These are more desperate claims from Rishi Sunak who lied to the British people before and is lying to them again.
The Institute for Fiscal Studies is in despair at the honesty of the debate about taxation during the campaign. It says both main parties are refusing to be honest about the need for tax rises or deep spending cuts after polling day.
Here is the agenda for the day.
9.30am: Douglas Ross, the Scottish Conservative leader, is holding a press conference.
Morning: Rishi Sunak, Keir Starmer and other leaders are attending the D-Day Commemorations at the British Normandy Memorial, Ver-sur-Mer. Starmer will also be at the afternoon event at Omaha beach.
10am: Ed Davey, the Lib Dem leader, is campaigning in Wiltshire. In the afternoon he will be campaigning in Oxfordshire.
11am: Adrian Ramsay, the Green party co-leader, and Dr Pallavi Devulapalli, the party’s health spokesperson, hold a press conference on the party’s health plans.
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