Labour is facing questions over how it plans to fund its investment plans for Government after Jeremy Hunt stole its plans to hike taxes on non-doms and energy firms in order to cut National Insurance.
The party has admitted it will have to ‘adapt’ some of its spending plans following the Budget, accusing the Government of having ‘burned down the house’ on the public finances.
Wednesday’s announcements saw the Chancellor adopt two key Labour policies – scrapping the ‘non-dom’ tax status and extending the windfall tax on oil and gas companies – that the opposition had hoped would fund its spending commitments if it won the next election.
The move poses a problem for Labour, which said it would not seek to reverse Wednesday’s national insurance cut that was paid for in part by the windfall tax and non-dom changes. A spokesman said it remained committed to providing extra NHS appointments and breakfast clubs for every primary school child despite the changes, and would still look to raise money by closing ‘loopholes’ in the windfall tax.
This morning Labour’s shadow city minister James Murray refused to rule out other tax rises, telling GB News: ‘We will tell people in the manifesto. We will set out in the manifesto. Everything that we promise in the manifesto will be fully funded and fully costed.
The party has admitted it will have to ‘adapt’ some of its spending plans following the Budget, accusing the Government of having ‘burned down the house’ on the public finances.
This morning Labour’s shadow city minister James Murray refused to rule out other tax rises, telling GB News: ‘We will tell people in the manifesto. We will set out in the manifesto. Everything that we promise in the manifesto will be fully funded and fully costed.’
‘Yesterday, we had the most almighty U-turn from the government. The responsible thing for us to do is to take a step back, review what’s happened, look at the detail of what the Government had proposed, adapt how we will pay for our policies accordingly, and then set out our policy in our own time, but that will be there going into the General Election.’
The party has been keen to put pressure on the Prime Minister and the Chancellor after they both repeatedly rejected proposals to scrap the non-dom status on the grounds it would not raise money.
Keir Starmer yesterday branded Rishi Sunak and Jeremy Hunt the ‘Chuckle Brothers of decline’ as he accused the Tories of stealing Labour ideas to fill out the Budget.
The opposition leader took aim at changes to the non-dom tax regime and an extension of the windfall tax on energy firms – both Labour ideas the Chancellor previously criticised.
Sir Keir joked that Tory backbenchers might soon have to defend plans to remove private school tax relief – another Labour policy.
But behind the jokes the moves by Mr Hunt have created a problem for Labour if it wants to fund its plans to increase public spending if it wins the next election.
Today Rachel Reeves used a media interview to attack Mr Hunt over claims he could scrap National Insurance entirely.
The shadow chancellor told BBC Breakfast: ‘Yesterday, at the end of the Budget, the Chancellor started floating this idea that he was going to get rid of National Insurance altogether.
‘Well, that would cost £46 billion. And I would like to know where that money is going to come from, because I just wouldn’t make a promise like that without being able to say where the money is going to come from.
‘I think it is incumbent on politicians to be honest about the trade offs that have to be made.’