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‘I’m not going to write a budget here’: Rachel Reeves refuses to rule out further tax rises if Labor finds black hole in public finances post-election | Politics News
The shadow chancellor is asked by deputy political editor Sam Coates what Labor will do if the party finds a “black hole” in public finances if it gains power after the election.
By Sam Coates, Deputy Political Editor @SamCoatesSky
Tuesday 28 May 2024, 6:08 pm, UK
Rachel Reeves has refused to rule out tax increases beyond income tax, social security and corporation tax if Labor finds a black hole in the public finances once it enters government.
In an interview with Sky News, the shadow chancellor deflected questions about whether the government’s books could be worse than anticipated if Labor won the election, and how the party would raise the money to deal with pressing issues.
The shadow chancellor said her plans were fully funded, but that existing tax rises were only there to fund commitments already made, and insisted: “We have no plans for tax rises.”
But pressed on whether she would raise other taxes if there was a black hole in government entry, she said: “I’m not going to write a budget here.”
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The shadow chancellor draws a distinction between income tax, social security and corporation tax, saying her party has “already ruled out” increases for parliament.
But Reeves refused to address the question of what would happen if she encountered a black hole upon entering government – with some Labor figures expecting immediate cost pressures from the fragile prison service, the bankruptcy of local councils and the need to fund vast prison schemes. compensation, including those infected. blood in the next budget.
“There are no more tax increases that we are planning or that we need to fill any black holes,” she said.
Analysts point out that the Labor Party has not made any commitment not to increase VAT and is already extending this tax to private schools.
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“We don’t need to increase VAT because we don’t need to increase any taxes because all our plans, unlike the Conservatives, are fully costed and fully funded and people can have confidence in that – there will be nothing that we can say that we can’t explain in where the money will come from.”
Reeves spoke to Sky News on the same day he gave a campaign speech in Derby in which he declared that the Labor Party was the “natural party of British business” – and that included paying big salaries to bosses.
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In it first major speech of the election campaignthe shadow chancellor sought to persuade voters. The Labor Party is now pro-business and pro-worker.
She also said the party would bring the UK closer to the European Union, something Labor has previously announced, and “bring investment back to Britain”.
Reeves also criticized the Conservatives for promising to cut taxes for pensioners by creating a new “age-related” tax-free allowance – dubbed the “triple lock plus”.
Currently, people can receive £12,570 a year from their pensions before they start paying income tax – the same amount as the personal allowance for those in work.
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But if the party wins the next election, the retirement allowance would rise in line with average earnings, inflation or by 2.5% – whichever is higher – from next April, echoing the rules on annual pension increases of State.
The shadow chancellor accused Rishi Sunak of “desperately adding more baubles to a Christmas tree”.
“The truth is, unless you are sure where the money will come from, these sums simply don’t add up and therefore cannot be delivered.
“And that’s the question people have to ask at this election. Do they want another five years of chaos and decline under the Tories, or a changed Labor Party that offers stability? And, frankly, after what we’ve had these last few years, stability is change.”