Income tax will rise by 4% to fund Labour's £28bn green loan, says Hunt

Sir Keir Starmer confirmed the £28 billion figure on Tuesday, despite it already being the source of Tory attacks. Photo: MARIA UNGER

Income tax will have to rise by 4 percent to fund Labour's £28 billion green loan commitment, Jeremy Hunt said.

The Chancellor has warned that either taxpayers or large businesses will have to pay the bond. which has been called into question in recent weeks.

Rachel Reeves, Mr Hunt's Labor shadow, has repeatedly refused to use the £28 billion figure the party first announced in 2021 but now insists it is subject to its budget rules.

Responding to Treasury question, when a Conservative MP asked where Labor would find that sum, Mr Hunt said: «I'm curious where that £28 billion figure comes from.»

“But, as she asked, I will tell her that a £28 billion increase in spending — if you are going to stick to the fiscal rules as the other side says — it will mean a four per cent increase in income tax or a rise in corporation tax, which , they say they're going to cap it at eight per cent.»

Mr Hunt said: «I'm curious where the that figure is £28 billion.” 39; Photo: PA Wire

Sir Keir Starmer on Tuesday confirmed the £28 billion figure, despite it already being the source of Tory attacks.

Labour said it would «increase» the borrowing to invest amount in the second half of the next Parliament. if financial circumstances permit.

It comes as Tory backbenchers put growing pressure on Mr Hunt to cut business taxes in the Budget on March 6.

Sir Edward Leigh, a former minister, told the House of Commons: “It is very difficult to become an entrepreneur in this country. have become increasingly purgatory over the past 25 years.

“What small businessmen want is not more handouts from the government, not more benefits, but lower taxes, simpler taxes.

< p>“They want less regulation, not more regulation, they want lower taxes, they want government to get off their backs and push them away.”

Jonathan Gallis, a leading member of the New Conservative caucus of from the Tory right, called for Mr Hunt to increase the VAT registration threshold to £250,000.

“I will say that we will take any measures very seriously if they help small businesses,” replied Mr. n Hunt.

«They are the lifeblood of the country and we will look at these measures very carefully.»

Other Conservative MPs called on the government to increase business rates relief, to end the so-called «tourist tax» and reform IR35. regulation of small business.