London (Parliament News) – Shadow Chancellor Rachel Reeves promises no new taxes beyond current commitments if Labour wins the election. Labour rules out income tax, national insurance, corporation tax, or wealth tax increases. No budget until September.
Rachel Reeves has stated there will be no budget until September if Labour succeeds in the election and promised that the party will not disclose any additional tax measures beyond what it has already promised.
The shadow chancellor stated Labour’s election campaign would not include any surprise actions. The party has ruled out boosts to income tax, national insurance, corporation tax or any form of wealth tax.
How Will Labour Fund Its Current Commitments?
At her first significant speech of the campaign, Reeves said that all the tax calculations the party was planning in order to support its current commitments had already been reported. “There are no additional tax rises needed beyond the ones that I’ve said.”mLabour has already stated it will fund various pledges with efforts including a windfall tax on oil and gas firms, adding VAT to private school fees, taxing private equity dividends, and a different tightening of the non-domicile tax system.
Reeves ruled out a print budget or fiscal statement should Labour succeed in the election, saying she was dedicated to receiving forecasts from the Office for Budget Responsibility before any such event.
“The OBR requires 10 weeks’ notice to provide an independent forecast ahead of a budget and I’ve been really clear that I would not deliver a fiscal event without an OBR forecast,” she stated. That timeframe would mean no budget until mid-September.
Will Labour Raise the Personal Allowance if Elected?
She also hinted during her Q&A session at Rolls-Royce, in Derby, on Tuesday that there was no assurance Labour would be able to permit a rise in the personal allowance. Not doing so would in effect be a tax boost as wage inflation pushes people into higher tax bands.
“Unlike the Conservatives, I won’t make unfunded commitments, because the truth about unfunded commitments is that no one has any confidence that you can deliver on them,” she stated.
The Institute for Fiscal Studies, a major economic think tank, has called for a more translucent conversation about tax and spending. The director of the IFS, Paul Johnson, stated recently that both parties must “reckon with the reality of the economic and fiscal context in which this election is taking place”. He expressed they would face stark choices in government and that partakers would need to choose between cutting spending, increasing taxes further or increasing annual borrowing.
“The parties might well be reluctant to tell us which of these they would opt for upon taking office. That doesn’t mean that we should refrain from asking them,” the IFS report stated.
How Will Labour Gain Business Support if Elected?
In her address, which came as the party was supported by 120 major business leaders in a letter to the Times, Reeves expressed Labour would become the natural home for business.
“I’m not one of those politicians who thinks the private sector is a dirty word or a necessary evil. I’ve worked in the private sector … And I know that economic growth comes from the success of businesses, large, medium and small – there is no other way. I’m not talking about the old trickle-down, free-market dogmas of the past but instead a new spirit of partnership between government and business.”
Reeves expressed the economy would be a central theme of Labour’s election campaign. “We will oppose this election on the economy. Every day we will reveal the damage the Conservatives have done, and the further harm they threaten to do. And we will set out Labour’s alternative.”