Labor party will break income tax promises, cities fear

Sir Keir Starmer denies plans to raise household tax by £2,000 Posted by Jonathan Hordle — ITV via Getty Images

Investors believe Sir Keir Starmer will break his promise not to raise income and corporation tax, a new poll shows, as Rishi Sunak accuses the Labor leader of planning a secret £2,000 raid on every British household.

Poll The survey of 70 City institutions, including companies, pension funds, insurance companies and hedge funds, showed most do not believe Labour's pledge to freeze taxes.

About six in 10 surveyed by investment bank Nomura expected Sir Keir to boost corporate and income tax if Labor comes to power.

Just three in 10 said they expect taxes to stay the same while Labor is in power.

George Moran, research analyst at Nomura, said: “The view is that Labor is likely to break its promise not to raise corporations or earnings.” tax.

“Without any major changes to interest rates or growth prospects, the Labor Party will face difficult choices on fiscal policy. It would be optimistic for Labor to rely on an improvement in the economy.»

The results will put further pressure on Sir Keir and shadow chancellor Rachel Reeves over their tax plans.

Labour has pledged not to raise overall rates of income tax, VAT or national insurance for five years if elected. The party has also pledged not to raise corporation tax above the current rate of 25 per cent for the duration of the next Parliament.

The Tories say taxes will inevitably rise under Labour, given the party's spending plans.

Mr Sunak repeatedly accused Sir Keir of planning a secret £2,000 rise in household taxes during the first televised debate between the two party leaders, but Sir Keir denied the accusation.

Recommended

Treasury document explaining why Labor will cost you £2,000. More details

Hendrik Du Toit, chief executive of Ninety One City Trust, said: “Tax rates are high across the board. way up. Whatever people say in the election, they take it with a grain of salt.

“We have to face fiscal realities that are quite complex. We are certainly not planning for a world in which tax rates fall.»

Although the city expects Sir Keir to renege on his tax promises, the institutes believe a Labor government is almost certain.

>

Three-quarters of Nomura clients surveyed predicted a Labour majority of 75 or more seats, while just 1% said they expected a minority Conservative government. None of the respondents predicted the Conservatives would win a majority.

Mr Moran said: «The survey results suggest a Conservative majority is the ultimate risk scenario, with even a minority Labour government seen as a long shot.»

«The likelihood is also likely to have increased further since this poll was conducted as Nigel Farage has become a more prominent figure in the reform campaign.»

Labour has spent years building support in the City, seeing the financial industry as a key driver of both increased donations and increased giving. and improving the party's image on economic issues.