Shadow chancellor Rachel Reeves has vowed that a Labour government would not return to austerity, ruling out increases to income tax or national insurance. Speaking on the BBC’s Sunday with Laura Kuenssberg, she insisted the party's election manifesto would contain no unfunded proposals and that taxes on working people would be lower under Labour.
Reeves said Labour’s plans for public services, including additional funding for the NHS, 13,000 extra police and 6,500 more teachers, were all fully costed. She argued that austerity under the Conservatives had damaged the economy and public services, and that growth was essential to turn things around. To fund its pledges, Labour would introduce VAT on private school fees, increase tax on private equity bonuses, extend the windfall tax on energy companies, and crack down on non-doms and tax avoidance.
The shadow chancellor also defended Labour’s approach to ending fire-and-rehire practices after criticism from Unite union general secretary Sharon Graham. Reeves expressed regret over the union’s stance but insisted Labour still had trade union support for the largest extension of workplace rights ever. She stressed that fire-and-rehire would only be permitted in very limited circumstances, such as when a company faces bankruptcy with no alternative.
Reeves declined to confirm whether Labour would scrap the two-child benefit cap or set a timeline for increasing defence spending to 2.5% of GDP, leaving those questions unanswered.
