Keir Starmer's 'tax trap' manifesto with £8.5bn-a-year raid is tip of iceberg– new warning
Sir Keir Starmer unveiled his "tax trap" manifesto with a £8.5 billion-a-year planned raid that Tories warned is the tip of the iceberg.
The Labour leader is hitting private schools, energy firms and non-doms with extra levies to pay for his spending plans, pushing the tax burden up to a record high.
But experts warn that council tax, capital gains and pensions allowances are all up for grabs if Sir Keir takes power.
Prime Minister Rishi Sunak said Labour’s manifesto “would mean the highest taxes in history”.
“If you think they’ll win, start saving,” he added.
Conservatives said Labour's plans suggest the tax burden will rise to 37.4% of national income.
Chancellor Jeremy Hunt said Sir Keir has refused to rule out taxing “your job, your home, your pension, your car, your business”.
He said: “This is Labour’s Tax Trap Manifesto which contains only tax rises and no tax cuts. Under Labour’s published plans, taxes will rise to levels never before seen in this country.
“But that’s only the tax rises they’re telling you about – it doesn’t include the £2,094 of tax rises they’ll need to fill their £38.5 billion unfunded spending commitments.
“So what’s most important is not what’s in Labour’s manifesto, but it’s what they have kept out of it. They are refusing to rule out taxing your job, your home, your pension, your car, your business and they think they can get away with it without anyone holding them to account. Be under no illusion, from cradle to grave you will pay more taxes under Labour.”
Work and Pensions Secretary Mel Stride said: "Labour's manifesto is nothing but a full-throated commitment to taxing Brits within an inch of their lives.
"Under their plans, Britain will see the highest tax burden in our country's history. And with a £38.5bn blackhole in their budget, the £2,094 in new taxes on working families and their Retirement Tax raid on pensioners is just the tip of the iceberg.
"By contrast the Conservatives have a clear plan, taking bold action with our Triple Lock Plus commitment to deliver a secure future for pensioners. Labour would take us right back to square one."
Sir Keir launched the manifesto at Co-op’s headquarters in Manchester flanked by his shadow cabinet.
Iceland boss Richard Walker, who switched his support to Labour after the Tories rejected his bid to become an MP, was among the speakers introducing the glitzy event.
Sir Keir was just a few minutes in when was heckled about the “Tory” plans, but insisted he has turned Labour from a party of protest to a government in waiting.
But he faced repeated questions about his refusal to be clear with the British public about his true intentions if he wins power.
Challenged about the absence of new policies he took a jibe at Reform leader Nigel Farage, who is standing in Essex.
Sir Keir said: “If you want politics as pantomime, I hear Clacton is nice this time of year.”
The Labour leader was asked if it was a “Captain Caution” manifesto, but insisted it is a “serious plan for the future of our country”.
The manifesto contained almost no new announcements and its costings showed the amount it plans to claw in with its plan to hit private schools with VAT, penalise energy companies and increase levies on “non-doms”.
Paul Johnson, director of the Institute for Fiscal Studies, said Labour had diagnosed some “really serious” problems without being “at all specific” about what they will actually spend.
Although the party has ruled out raising VAT, national insurance and income tax, Mr Johnson said there were other ways to bring in extra cash, including an increase on capital gains tax.
“You could limit the allowances that you get for pension savings,” he said, “so there’s always of raising taxes beyond what they have ruled out.”
Mr Johnson warned Labour’s claims it will meet spending increases through growth cannot be met in the short term.
He said the party’s plans could increase national income but were “not something that will lead to a boom in the next few years”.
Labour has committed to maintaining the triple lock for the next five years but admitted that retirees only on the state pension will start paying income tax for the first time.
Silver Voices director Dennis Reed said: "Older people will be satisfied that the Triple Lock has been confirmed for the whole of the next Parliament.
“But we are worried that whoever wins the next election will put the state pension system under scrutiny in order to balance the books.
“Silver Voices will oppose any suggestions that the state pension age should be raised or that means testing of the state pension should be introduced.
“We welcome the positive proposals by Labour on the NHS, particularly the guarantee of face-to face appointments with GPs, tackling waiting lists and expansion of NHS dentistry. But we are disappointed that the proposals on social care are so vague.”
The manifesto also:
- Included plans to reform the House of Lords, including the enforced retirement from the upper chamber at 80.
- Pledged to build 1.5 million new homes and reform the planning system
- Restated Labour’s plan to create state-owned clean energy generation firm Great British Energy, backed by £8.3 billion over the course of the parliament.
- Promised radical workers’ rights reforms, including a ban on zero hours contracts.
Former Labour shadow chancellor Ed Balls said the manifesto “will be seen as a straitjacket” with its commitments not to raise income tax or VAT or national insurance and warned it makes a first year in government for Labour “very difficult”.
John O’Connell, chief executive of the TaxPayers' Alliance, said: “Taxpayers hoping for change from an ever-rising tax burden will be bitterly disappointed by a Labour manifesto that may rule out major tax rises, but leaves the door open to alternative ways of tapping up workers, families and businesses.
“With substantial spending commitments to pay for, a Keir Starmer government will inevitably be looking to find ways to dip deeper and deeper into the pockets of Brits, effectively guaranteeing years of further stagnation.”
Rachael Griffin, tax and financial planning expert at Quilter, said: “The conspicuous lack of confirmation from the Labour manifesto that it would not raise Capital Gains Tax will spark significant concern among entrepreneurs and investors in the UK.”
Work and Pensions Secretary Mel Stride said: "Labour's manifesto is nothing but a full-throated commitment to taxing Brits within an inch of their lives. "Under their plans Britain will see the highest tax burden in our country's history. And with a £38.5bn blackhole in their budget, the £2,094 in new taxes on working families and their Retirement Tax raid on pensioners is just the tip of the iceberg. "By contrast the Conservatives have a clear plan, taking bold action with our Triple Lock Plus commitment to deliver a secure future for pensioners. Labour would take us right back to square one."
