Labour has promised not to raise income tax or National Insurance if elected at the next general election – however, the party has not yet ruled out making some cuts to public spending. Speaking to the BBC, Shadow Chancellor Rachel Reeves stated she did not intend to make any spending cuts, but acknowledged the challenges that lay ahead and confirmed that difficult decisions would need to be made. Labour has claimed that the Conservatives have cut National Insurance twice and stated that the party aims to abolish the tax when circumstances allow.
The Conservatives, meanwhile, have accused Labour of having “no plan to cut taxes” and of leaving working families to pay for their unfunded spending commitments. Economic Secretary to the Treasury Bim Afolami commented that Rachel Reeves’ comments showed that “it’s just the same old Labour Party who have no plan to cut taxes and instead are leaving hard-working families to foot the bill for their unfunded spending commitments”. The choice facing the electorate was, he said, between a “clear and bold plan to cut taxes, and end the double tax on work, under Rishi Sunak, or going back to square one with the same old Labour Party… who as soon as they run out of money will come after yours”.
Ms Reeves has confirmed Labour’s commitment to lower taxes, adding that the party would not propose any unfunded plans. She also revealed Labour had opposed increases to national insurance when such measures had been put forward previously by the Conservatives. Labour has claimed that the government’s ambition to abolish national insurance contributions for workers would cost £46 billion, a claim contested by the Conservatives, who have argued that this would not occur before 2030, and only if the economy grew sufficiently.
In addition, the Conservatives have claimed that Labour’s spending commitments would leave a £38.5 billion black hole in government finances, equal to a “tax rise of £2,094 on every hard-working family”. Labour has dismissed the figures. At the weekend, The Institute of Fiscal Studies warned that the challenges facing the next government were significant and that more tax rises or cuts to public services could lie ahead regardless of the outcome of the election. Labour has promised there would be no return to austerity under its stewardship
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