Labour Pledges to Freeze Major Taxes for Five Years in Manifesto Launch
The Labour party has promised to keep income tax, national insurance, and VAT at their current rates for the next five years if they win the upcoming general election. This announcement was made by shadow chancellor Rachel Reeves, who had previously stated that Labour would not raise taxes, ahead of the party’s manifesto launch on Thursday.
Reeves has now promised to implement a “triple lock” on these three main taxes during the first term in power. This means that any potential increases in these taxes would require Labour to make cuts or find alternative sources of revenue, should they win the election on July 4th.
The Institute for Fiscal Studies (IFS) has cautioned both the Conservatives and Labour about their ambitious spending plans, stating that they would both be forced to make significant cuts in order to meet their fiscal goals. The IFS also noted that neither party seems to be fully committed to reducing the national debt, which is a crucial aspect of sound fiscal policy.
As the election campaign enters its third week and the Conservatives announce new policies in an effort to close the gap in the polls, Ms Reeves has criticized the Tories for their “fantasy” plans. In an op-ed for The Sun, she accused them of adopting the same approach as former Labour leader Jeremy Corbyn, which she wholeheartedly rejects.
Reeves emphasized that she will not make promises that cannot be fulfilled, stating, “I’m not going to offer you a fantasy manifesto that writes cheques we could never cash. I will never do this.” This statement comes in response to the Conservatives’ plans for a stamp duty cut for first-time homebuyers and Chancellor Rishi Sunak’s recent comments about making welfare reform a “moral mission.”
However, Labour’s latest attack on the Tories could potentially anger the party’s left-wing supporters, who are pushing for more ambitious spending plans. The Conservatives were quick to point out that Reeves, who has been an MP since 2010, has campaigned for Mr Corbyn’s manifesto twice before, in both the 2017 and 2019 general elections.
As the election race heats up, both parties will need to carefully consider their fiscal policies and how they plan to address the country’s growing debt. With the IFS warning about the potential consequences of their plans, it remains to be seen which party’s approach will resonate with voters.
