ANAS Sarwar has been left red-faced following comments he made about Labour’s tax plans during the election campaign.
It comes as Chancellor Rachel Reeves confirmed the government will have to raise some taxes in October’s Budget following months of speculation about the party’s stance on the issue.
Responding to a question about raising money following her claim on Monday that the previous Tory government left a £22 billion “hole” in the public finances, the Chancellor told the News Agents podcast: “I think we will have to increase taxes in the Budget.”
Reeves reiterated that she would not raise VAT, national insurance or income tax, as promised in Labour’s manifesto, although did not rule out increasing inheritance tax, capital gains tax, or reforming tax relief on pensions.
She told the show she wasn’t going to “write a Budget or start to write a Budget on this podcast” as she said Labour want to stick to “sensible” rules aimed at reducing long-term debt.
Anas Sarwar comments
In June, Rishi Sunak (below) found himself in a row with Labour after he claimed the party’s spending plans would result in a £2000 tax rise for working families.
Following Sunak’s claim, chief Treasury civil servant James Bowler said in a letter to Labour that the Tories’ assessment of their tax plans shouldn’t be “presented as having been produced by the civil service”.
A number of questions about the credibility of the figure were raised with Sarwar saying Sunak had spread misinformation and that it was a “lie from a desperate prime minister”.
However, Sarwar also added: “There will be no tax rises for working people.”
During a visit to Glasgow, Reeves also told the BBC: “The prime minister lied in the debate last night about Labour’s tax plans.
“Labour will not be increasing taxes on working people.”
Speaking on the News Agents podcast however, Reeves said: “We had in our manifesto a commitment to fiscal rules to balance day-to-day spending through tax receipts, and by the end of the forecast period, to get debt down as a share of GDP.
“Those are sensible fiscal rules to keep a grip of the public finances. We also made other commitments in our manifesto, not to increase national insurance, VAT or income tax for the duration and we’ll stick with those.”
Pressed more specifically on which taxes could go up, Reeves said: “We will have a Budget on October 30 and ahead of that Budget, we will have a forecast by the Office for Budget Responsibility on this occasion, based on accurate numbers.”
Reacting to the news, Scottish Greens co-leader Lorna Slater (below) told The National the problem isn't taxation but "Labour's fundamental dishonesty about how they intend to pay for their plans".
She said: "A lot of us pointed out the huge gaps in their proposals throughout the election campaign but were accused of scaremongering.
"If people are being asked to pay more then it is crucial that any rise falls on the wealthiest people.
"The Scottish Greens have ensured that Scotland has by far the most progressive taxation system anywhere in the UK. We are proud of that and have been upfront about it every step of the way."
She added that Labour also have a "lot of levers that Scotland does not and can introduce wealth taxes on polluting corporations and the super-rich that go far beyond anything that we are able to do under devolution".
"That is how money should be raised, rather than keeping cruel policies like the two-child benefit cap and inflicting the kind of cuts that have been announced this week."
Meanwhile, SNP MSP Collette Stevenson (below) said: "This is just the latest example of Anas Sarwar's election promises coming back to bite him.
"It follows his humiliating U-turn on his 'read my lips - no austerity under Labour' comment made during an election debate and every single Scottish Labour MP voting to keep the two-child benefit cap last week – despite Mr Sarwar’s previous promises that they opposed the policy.
"It is clear that Anas Sarwar has no influence over his London-based bosses and cannot be trusted to deliver on any of his promises.
‘Difficult decisions’
Labour have been under pressure on their economic policies, with Stephen Flynn saying Monday marked a “new era of austerity” as Reeves unveiled billions of pounds in spending cuts.
The Chancellor said her aim was to “expose the scale of what has been uncovered” after Labour came to power, pointing to a £22 billion black hole left by the previous government.
She set out “immediate action” to deal with this, including cancellation and delays of major infrastructure projects and Winter Fuel Payments for millions of pensioners in the UK.
Sarwar has also faced criticism following the speech as he repeatedly said there would be “no austerity” under a Labour government throughout the General Election campaign.
We also told how hundreds of people had put their name to a petition calling on the Scottish Labour to resign for “misleading the Scottish electorate”.
Scottish Labour have been contacted for comment.
