Mr Hunt says that “a future Conservative government will not increase any income tax or national insurance rates”; Photo: Geoff Pugh for The Telegraph -4223678de837.html?direct=true&id=bc72b371-0215-4d99-b27b-4223678de837&template=articleRendererHTML' class='tmg-particle Sticky-nav wrp-bc72b371-0215-4d99-b27b-4223678de837' title= “General Election” data business-type='editorial' loading='eager' scroll='no' Frameborder='0'allow='web-share' style='width: 100%; min-width: 100%; border: none; position: relative; display: block; padding: 0px; margin: 0px;'>
Jeremy Hunt has accused the Labor Party of having a secret plan to increase VAT and called on Sir Keir Starmer to explicitly rule out such a possibility.
The Labor Party has repeatedly refused to rule it out after being asked at various campaign events.< /p>
On Wednesday evening, following the allegations, shadow chancellor Rachel Reeves issued a statement insisting the party has no plans to increase VAT, although it remains to be seen whether this will become a manifesto. commitment.
The attack will be on the first Conservative election campaign poster unveiled on Thursday, which reads: “If you think Labor will win, start saving…”
The Tories are announcing a one percentage point increase in spending. The basic rate of VAT would raise around £9 billion a year – the same thing they claim is the funding black hole in Labour's plans.
In an article for The Telegraph, Mr Hunt says: “Rising VAT will hit families' finances and push inflation back up, just when we brought it back to normal levels.
“That is why I can today commit that not only will a future Conservative government not increase any rates of income tax or national insurance, but we will not increase the main rate of VAT for the duration of the next Parliament. Keir Starmer should make the same clear commitment on camera today.”
Ms Reeves insisted Labor would not raise VAT, saying: “This is absolute nonsense. The Labor Party will not increase income tax, national insurance or VAT.
“I want taxes on workers to be lower, not higher. That's why we opposed increasing national insurance when Rishi Sunak proposed it as Chancellor.”
Ms Reeves insists Labor will not increase income tax, national insurance or VAT: Maja Smajkowska/Reuters
Meanwhile, City economists said tax rises would be “inevitable” under a Labor government as Sir Keir Starmer prioritizes increased spending on public services.
Deutsche Bank analysts say Sir Keir and Ms Reeves will likely have to find an extra £15-25 billion in the first post-election review of government spending.
The exchange highlights how Conservative strategists see the situation in the job market. The fight for the economy is the central issue of the campaign and seeks to restore its reputation as a low-tax party.
Mr Hunt and Rishi Sunak made the bulk of their national insurance cuts in the autumn 2023 statement. and this year's spring budget, saying they were focused on cutting taxes after curbing inflation.
But that argument has been challenged due to the tax hikes the Conservatives have seen since the 2019 election, bringing the overall tax burden hit a 70-year high – which they blame on the financial fallout from the Covid pandemic and the war in Ukraine.
The Labor Party has long sought to roll back imminent tax attacks, which was seen as crucial in Labour's surprise defeat under Lord Kinnock in 1992, when the Tories won another victory.
Both Ms Reeves and Sir The Keirs emphasize that they want to cut taxes for working people, although the specifics of their tax approach if they win the election remain unclear.
The new poster will be placed on billboards across the United States. countries since Thursday, next to the inscription “Start saving”, written in thick black letters, there is a picture of a piggy bank.
Tory insiders said the design was chosen to resemble the party's famous “Labor Party Isn't Working” poster after Margaret Thatcher's 1979 victory. The slogan of this poster, which appeared next to the winding queue leading to the employment office, is written in black capital letters. .
The first Conservative campaign poster will be unveiled on Thursday
Mr Hunt says: “The first week of the campaign has shown how they want to fill this gap. Keir Starmer and Rachel Reeves have explicitly said they are promising not to raise income tax or national insurance in the next parliament. But they have repeatedly refused to provide the same guarantees regarding VAT.
“When asked four times to rule out raising the main VAT rate earlier this week, the shadow chancellor refused to do so. Keir Starmer was asked the same question twice and refused to do it too. Raising VAT to 21 percent would raise about £9 billion a year – almost exactly what the analysis I published said would be needed to close the black hole.
“Coincidence? I don't think so. Obviously.” that Keir Starmer and Rachel Reeves have a plan to raise VAT and they don't want you to know about it until after polling day.”
The Chancellor is set to make his claims during another live interview on Thursday. in the morning.
The idea that Sir Keir has a £9 billion-a-year hole in his spending plans is strongly disputed by Labor, which questioned the assumptions on which the analysis was based.
On Wednesday, Labor released own statement, saying there was a £71 billion-a-year black hole in Tory spending plans.
It contained dubious assumptions, such as that the Tories would abolish national insurance in the first year. It is a long-term ambition for the party, and some cabinet ministers say it may have to be implemented over 10 years or more.
Darren Jones, Labour's shadow chief secretary at the Treasury, accused the Tories of having “unfunded » spending plans and criticized the flurry of recent policy announcements.
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