Labour’s election manifesto will not rule out increases in council tax, fuel duty and capital gains tax, Sir Keir Starmer admitted on Wednesday.
The Labour leader repeatedly declined to rule out tax rises if he became prime minister after the general election, during a Sky News election programme.
During the interview with Beth Rigby, Sir Keir was repeatedly asked to explicitly promise that there would be “no tax rises” if he won the general election on July 4. The Labour leader declined to do so.
Instead, he promised “no tax rises for working people”, leaving open the possibility of increasing taxes on wealth.
At one point, Sir Keir said: “I’m not going to sit here tonight and write the next five years’ worth of budgets, and you would not take me seriously if I did.”
He took a similar approach when pressed to rule out increases in council tax – something Welsh Labour is looking at raising – capital gains tax and fuel duty. On council tax, he said: “That is not in our manifesto. That is not a choice we are making.” And on fuel duty, he said: “That has to be decided budget by budget.”
But there was no explicit promise the three taxes would not be raised. Rigby pointed out that “no plans” for such moves meant they “might” happen. The remarks were leapt on by the Conservative Party, with Rishi Sunak saying: “He’s failed to rule out raising taxes. Again. Labour will raise your taxes.”
Sir Keir was also put on the spot about his past support for Jeremy Corbyn, the former Labour leader whom he once said would make a “great prime minister”. Asked whether he meant those words, Sir Keir declined to say yes. Instead, he said he always believed that Labour was going to lose the election under Mr Corbyn.
On Wednesday, Bridget Phillipson, the shadow education secretary, was pressed on ITV as to why Labour did not support the Green Party’s wealth tax on the mega rich. She responded: “I don’t believe that we need to set out wider plans in that area.”
Sir Keir will launch the Labour election manifesto in Manchester on Thursday, where he will attempt to rebut attacks on tax by insisting that “wealth creation” would be his priority in Downing Street. The Labour leader will say: “This is a manifesto for wealth creation – that is our number one priority”.
He will also call Labour “the party of wealth creation”.
The manifesto is expected to explicitly rule out increases in the rates of income tax, National Insurance, VAT and corporation tax.
The Labour leader will say at the manifesto launch: “Some people say that how you grow the economy is not about how you create wealth, but how you tax it, how you spend it, how you slice the cake... So let me be crystal clear, this manifesto is a total rejection of that argument.”
- Read the full 2024 Labour Party manifesto
The focus on wealth is unusual for a Labour leader. The party has historically focused on the redistribution of wealth through taxation. However, there are echoes of the comment made by Lord Mandelson, one of the architects of New Labour, about how he was “intensely relaxed about people getting filthy rich”.
It speaks to Sir Keir’s attempt to occupy the centre ground and make Labour electable again.
Mr Sunak also faced tough questioning in the Sky News programme. He admitted he had not managed to cut NHS waiting lists and said immigration to the UK was too high.
Taxes have become one of the most contested policy areas in this election, with the Tories focusing on the issue as they try to shrink Labour’s 20 percentage point opinion poll lead.
The Conservatives will announce on Thursday their “family business tax guarantee”, pledging not to raise employer National Insurance, capital gains tax and corporation tax, and will call on Labour to do the same.
Sir Keir has attempted to counter the criticism on tax by pointing out that the fiscal burden as a share of GDP has been rising to its highest level since the Second World War under the Tories. He said: “We’ve got the highest tax burden for 70 years and I think working people shouldn’t pay more tax. We will not raise their tax.”
Time to embrace Labour’s change
By Peter Kyle
This morning, Keir Starmer will take to the stage to launch Labour’s election manifesto and put our bold vision to grow the economy at the heart of this election campaign. Whether it was the New Labour government embracing the opportunities of the internet or Harold Wilson’s white heat of technology, Labour governments have always worked hand in hand with the UK tech sector to boost our economy. If voters put their faith in us this July, we will do the same again.
I had the opportunity yesterday to visit London Tech Week and to see the fantastic work that British tech companies are doing. Take the example of Wayve, a British autonomous vehicle company with more than $1 billion (£780m) of funding that’s competing with the tech giants at Tesla and Google. There are British entrepreneurs across our country that have the ideas we need to grow the economy of the future. They just need a government that will help to make it happen.
The energy at London Tech Week stood in stark contrast to the news yesterday that Rishi Sunak’s government has seen the economy flatline once again. The UK has all the right ingredients to create a high-growth economy, but the Conservatives have failed to make it happen. The Conservatives have created a slow state which stops innovation in its tracks and drives away private investment.And Rishi Sunak’s unfunded spending pledges would push up interest rates and add £4,800 to mortgages over the next parliament.
Just think about some of the ways the Government has slowed down innovation. Regulation is no longer keeping pace with new technology. The Tories have created a system where a new satellite company has to navigate 11 different regulators. Small businesses have been locked out of the procurement system and have to contend with ever-increasing requirements, micromanagement and red tape. Innovators are left waiting months-on-end to get decisions from government, falling behind their overseas competitors.
We have a plan to rocket boost ourtech sector and to unlock the growth this country so badly needs. Labour’s plans for a regulatory innovation office will drive growth by setting targets for regulators approving cutting-edge innovation. We will support startups and encourage innovation by cutting red tape and streamlining the procurement process for innovative firms.
Our tech entrepreneurs are also taking bold risks to turn new ideas into reality and we need to give them as much economic stability as possible while they do so. That’s why we are going to launch an AI sector plan, created in partnership with business and workers as part of our new modern industrial strategy. Our reforms to the planning system will ensure we can build the data centres and other infrastructure that the tech sector needs for the long term. We’re going to develop a new national data library to support cutting-edge research with secure and responsible access to data, and we’re going to give our scientists the long-term certainty they need by putting in place 10-year budgets for our world-leading innovation centres.
When the votes are cast in this election, the most important mission for the next government will be growing our economy. We can’t do that without embracing the opportunities of AI, new technology and innovation. The economy is changing and the UK needs to keep up the pace so we don’t risk falling behind. With our plan for stability, investment and reform, we have the chance to make that happen. It’s time for change, and it’s a change worth having.
Let’s work together to embrace the future.
Peter Kyle is Labour’s shadow science, innovation and tech secretary
