Labour's Rachel Reeves rules out increasing income tax or NI
Reeves declares that Labour will not implement austerity measures in the future.
Authored by Jennifer McKiernan, Dharshini David, and Chas Geiger
The Labour party has declared that they won't increase income tax or National Insurance if they clench the general election victory. However, they may consider implementing some budget cuts.
During an interview with Laura Kuenssberg from the BBC, Rachel Reeves, the shadow chancellor, expressed her desire to avoid implementing any austerity measures.
However, she was well aware of the magnitude of the task ahead and acknowledged that she would encounter hard choices, according to her statement.
The Conservative Party has reduced the National Insurance payment system on two different occasions. They have also expressed their intention to eliminate it completely when it is feasible to do so.
Bim Afolami, who is the Economic Secretary to the Treasury, expressed that the statements made by Ms. Reeves exhibit that the Labour Party hasn't changed from their previous political stance, and they don't have any proposals to decrease taxes. Instead, they are making the middle-class families bear the expenses of their overspending commitments without any proper funding.
During the election, people had to choose between two options. The first, brought by Rishi Sunak, was a definite and strong plan to decrease taxes, and put an end to the unfair double tax for working citizens. The second option was to go back to the starting point with the Labour Party. This party has repeatedly proven to have no alternatives left when they run out of money, and may resort to taking your hard-earned income. The speaker clearly endorsed the first option.
During an interview with Laura Kuenssberg on Sunday, Ms Reeves stated that the Labour party is in favor of reducing taxes. However, she also mentioned that they are not willing to suggest any proposals that do not have appropriate funding.
When asked about her tax proposals, she responded by reiterating her and Keir Starmer's stance of reducing taxes on individuals who are employed. She confirmed that there will be no rise in income tax or national insurance if they are victorious in the upcoming election.
We were against the raised national insurance rates that were proposed by Chancellor Rishi Sunak."
The Conservatives have already accumulated £64bn of tax cuts that are not supported by funds in just three days of campaigning. In contrast, I will never be reckless with public funds, and I will never propose ideas that do not have proper funding.
According to the Labour Party, getting rid of national insurance charges for employees as a goal set by the government would result in a £46bn expense. However, the Conservative Party has asserted that this only has the potential to happen if the economy thrives, and it will not be considered until the year 2030.
The Conservative party has declared that if Labour implements their spending proposals, it would create a deficit of £38.5 billion in the government's funds. This amount, according to Mr. Afolami, would be equal to imposing a tax increase of £2,094 on each working family. However, Labour has disregarded these statistics.
The Institute of Fiscal Studies, a group that thinks independently, gave a serious alert on Saturday. They cautioned that the upcoming government will face many difficulties due to the country's public finances being a big concern during the election campaign. They described it as a dark cloud looming over everything.
The announcement stated that there is a possibility of an increase in taxes or reduction in public services, regardless of who emerges victorious on July 4th.
Ms Reeves made a promise that there won't be a repetition of the cutbacks in government spending called "austerity". She assured the public that their pledge to improve essential services is just the beginning of the improvements they aim to do.
The funding for our National Health Service (NHS), the extra 13,000 police officers and community officers, and the 6,500 more teachers who will join our schools, have all been properly calculated and have secured the necessary funding. If something is not thoroughly calculated and financed, it's difficult to trust that it will actually occur.
Labour promised to generate revenue by discontinuing the VAT exclusion for private educational institutions and by prolonging the windfall levy imposed on energy corporations.
The political group also declared that they will collect £5 billion annually by confronting the issue of tax avoidance and evasion. Moreover, they plan to acquire an additional £2.6 billion by eliminating the "loopholes" present in the government's strategy to get rid of non-domiciled individuals' exemptions. Non-domiciled people who live in the UK are those who consider their permanent home for taxation purposes is in another country. This enables them to avoid paying UK taxes on any earnings made outside the country.
Ms. Reeves stated that ultimately, it is necessary for us to expand our economy and improve our unsatisfactory economic state.
Afterwards, while on a campaign trip to Ossett, West Yorkshire, someone asked if she would completely eliminate raises in additional taxes such as VAT and capital gains tax. In response, she declared that their proposals do not call for any additional increases in taxes.
The shadow chancellor made a commitment to quickly add money to the NHS to increase the amount of appointments and hire more teachers. However, if Labour maintains its policy of not using loans to support daily expenses, other public spending sectors like local councils and justice could experience reductions.
Ms Reeves has declined to establish a specific timeframe for the Labour government's plans to raise defence expenditure to 2.5% of the country's income. She stated that there will be an examination of defence expenses that have spiraled while the current administration has been in power.
Sunak has promised that by 2030, the budget for defence will increase and reach 2.5%.
The Labour party's shadow chancellor has announced that if they become victorious in the election, they will conduct a review of their expenses. Additionally, they plan to implement a "fiscal lock" which implies that any significant and long-term alterations made to taxes and spending would mandate a complete prediction from the independent Office for Budget Responsibility (OBR).
The OBR usually requires a lead time of 10 weeks to generate a prediction, and analyzing the proposals of opposing political parties is prohibited.
In essence, if Labour is serious about their promise to undergo a thorough process, the OBR would have to factor in and assess any proposed policies after the general election results before any spending could commence. This delay is necessary for a comprehensive evaluation.
The leader of the Liberal Democrats, Sir Ed Davey, stated that his party had already promised not to increase taxes for regular citizens.
He remarked that individuals are overburdened with taxes during the Conservative regime as taxes have been increased to an all-time high by the Conservatives.
During a speech in Cambridgeshire, Sir Ed expressed that the Liberal Democrats were feeling enthusiastic about their campaign and had the potential to triumph over the Conservative party in places where Labour cannot.
The SNP claimed that Labour was attempting to deceive the public regarding their financial proposals.
Drew Hendry, the representative for the party's economic matters, stated that the Labour party had put forth a harmful proposal to decrease financial support for publicly available amenities by a significant amount of money.
He stated that both the Conservative and Labour parties have a silent agreement to implement austerity measures.
