Tories ‘gaslighting public over state of the economy’
But Labour won’t commit to raising tax-free thresholds
WORKERS face paying more income tax under a Labour government after Rachel Reeves refused to commit to unfreezing thresholds.
The Shadow Chancellor said she wanted people to pay less tax but that she would only act “when resources allow”.
Due to inflation in recent years wages have risen but tax band thresholds have stayed put, meaning many people are paying more without an increase in the rates themselves.
Chancellor Jeremy Hunt is also refusing to change the rate boundaries. It comes as analysis suggests the country’s tax burden is set to rise to an 80-year high of 37.1% by 2028.
Ms Reeves, who was introduced by former Conservative MP Nick Boles, who quit the party in 2019 over Brexit, spoke after giving a speech accusing the Tories of “gaslighting” the public over the state of the economy.
She argued that Jeremy Hunt and Rishi Sunak’s likely message of an improving economy is “deluded”.
Her intervention came as the Bank of England’s Monetary Policy Committee was expected tomorrow to keep rates at the current 5.25%, despite government pressure to lower them before the election. Ministers may be more cheered by the Office for National Statistics’ quarterly GDP data this Friday, which is expected to show the UK has exited its recession.
But Ms Reeves said that, having described the downturn as a “technical recession”, the Chancellor would be “comfortable calling it a technical recovery”. Chief Secretary to the Treasury Laura Trott said: “Rachel Reeves still can’t say what Labour would actually do to grow the economy, offering only the same buzzwords and unfunded spending commitments. “This is the same old Labour Party that always leads to higher taxes, higher unemployment, the betrayal of pensioners and the hammering of businesses – with Labour’s 70 new regulations that would cost jobs and damage economic growth.”
Despite a slight drop in 2024 to 36%, taxpayers will face an increased burden every year from now, according to the TaxPayers’ Alliance.
Mr Sunak has slashed National Insurance to placate Tory backbenchers and voters.
But amid a freeze on personal thresholds, the nation’s tax burden is rising – and will hit a high not seen since 1948 in four years, the campaigners warned.
Ms Reeves also committed to a “new deal for working people” in the first 100 days of a new administration. She said firms had “nothing to fear”.