Rachel Reeves stated that she “doesn't want the tax burden on working people to increase.” Photo: Jeff Overs/BBC/PA
The Labor government will seek to cut income taxes, the shadow chancellor said as Rishi Sunak faced backlash from the Tories over the rejection of campaign cuts.
Rachel Reeves sought to allay fears that Labor would “tax and spend” in government, saying in a series of interviews on Sunday that she would like to cut taxes for working people.
It comes as Mr. Sunak faced growing disappointment from conservatives after Chancellor Jeremy Hunt ruled out any major tax cuts this fall ahead of a general election due next year.
Y Ms. Reeves said: “I don't want the tax burden on working people to increase. In fact, I would like the tax burden for working people to be lower, but this should be built on the basis of economic and fiscal stability.”
The Shadow Chancellor promised that the Labor government would not. anything that violated its “non-negotiable” fiscal rules based on reducing the share of debt in national income in five years and paying for everyday expenses with tax revenue.
“All our plans will be built on the foundation of economic and financial responsibility,” she said. “Labour will not play fast and loose with public finances.”
The highest tax burden since World War II
Her comments followed Sir Keir Starmer's promise that Labor would not reverse a proposed cut in income tax from 1d to 19d, originally put forward. Liz Truss and Kwasi Kwarteng.
Mr Sunak has previously said the government will aim to introduce it before the next election after the Treasury Department delayed it. However, in an interview with the Financial Times this weekend, Mr. Hunt said the government “won't approve of a tax cut if it makes it harder to fight inflation.”
On Sunday, Victoria Atkins, financial secretary of the Treasury, said the government didn't have “room” to consider cutting taxes while it fought inflation.
The shift drew backlash from Conservative MPs and their colleagues, while Lord Frost, Boris Johnson's Brexit negotiator, said: “This country has no future as a high-tax, high-spending economy. We must reduce taxes and spending both through savings and reforming the economy to boost growth.”
Sir John Redwood, former head of policy number 10 under Margaret Thatcher, said Treasury orthodoxy has plagued the government “for some time.”
“The danger is that if you keep raising taxes, you will increase the deficit.” , – he said. “When you damage the enterprising part of the economy, you lose investment support and everything else.
“If you were to choose to cut taxes, preferably balanced by sensible cuts in less important government spending, you would have a growth strategy that would then reduce the deficit because you generated more revenue.”
Ms Reeves disputed offers. that its tax and spending policies will follow those of the Conservatives until growth returns. She pointed to Labor's plans to boost revenues, including removing tax breaks for homeless people and removing VAT exemptions for private schools.
The Shadow Chancellor said she was confident Labor would comply her pledge to spend £28bn a year on environmental initiatives during her first term in government, although she refused to make a hard-line commitment because it would depend on the party's fiscal rules.
Labor angered the campaigners for change climate within the party, softening the promise to borrow the amount to invest to deal with the environmental crisis. Ms Reeves argued that the financial situation worsened after making a commitment following Ms Truss' disastrous mini-budget.
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