Shadow Chancellor Rachel Reeves has ruled out increases to income tax and National Insurance under a Labour government, but she has not extended similar guarantees to other taxes. In an interview with the BBC, Ms Reeves said Labour would not raise income tax or National Insurance if it wins the general election, but she refused to rule out hikes to VAT or capital gains tax.
Ms Reeves insisted there was “nothing in our plans that requires further tax rises” but declined to make a blanket commitment. Her refusal to rule out other tax increases comes as Labour faces pressure over its spending plans, with the Conservatives accusing the party of leaving a £38.5bn black hole in the public finances.
The Tories have attacked Labour’s economic approach, with Economic Secretary Bim Afolami claiming the party would ultimately raise taxes on working families. Ms Reeves dismissed the Conservative figures as untrue and reiterated Labour’s support for lower taxes, but only when accompanied by fully costed proposals.
Labour’s spending commitments include funding for the NHS, police, and teachers, which Ms Reeves said would be paid for by ending the VAT exemption for private schools, extending the windfall tax on energy firms, and closing tax avoidance loopholes. However, the independent Institute for Fiscal Studies has warned that more tax rises or spending cuts may be necessary after the election.
Ms Reeves also promised there would be “no return to austerity” but did not rule out cuts to unprotected areas such as local council services and justice. She said Labour would grow the economy to address the fiscal challenge, but a spending review would be required to set departmental budgets.
