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The Independent UK
The Independent UK
National
Kate Devlin

Jeremy Hunt accuses Rachel Reeves of preparing to use inflation rise as cover for ‘planned’ tax hike

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Jeremy Hunt has re-opened his bitter battle with Labour suggesting Rachel Reeves is preparing to use a rise in inflation as cover for “planned” tax rises.

The shadow chancellor also warned the woman who replaced him at the Treasury last month “must not use this data as an excuse to break her promises”.

Newly released figures show inflation has risen back above the Bank of England’s 2 per cent target, to 2.2 per cent in July.

The first increase of 2024, it follows months of steady decline, but is still slightly below what many economists were predicting.

Rishi Sunak was accused of lying “through his teeth” and labelled a “pound shop Boris Johnson” after his high-profile claim Labour was planning a £2,000 tax hike after the election was rubbished by the Treasury.

Ms Reeves did say earlier this month that she thinks taxes will have to be raised in the Budget.

Her admission came a day after she warned of a £22 billion black hole she had discovered in the public finances left by the last Conservative government.

Spending must rise sharply under the new Government to bring UK public services ‘up to scratch’, according to a leading think tank (Dominic Lipinski/PA) (PA Archive)

In response, she immediately scrapped a series of infrastructure projects and announced the winter fuel allowance for pensions would be means-tested.

But the chancellor said Labour would stick to its election manifesto promises not to raise national insuranceincome tax or VAT, even as she left open the possibility of other tax hikes on 30 October 30.

Darren Jones, the chief secretary to the Treasury, said the latest inflation figures show many families are "still struggling with the cost of living".

But Mr Hunt they showed more needed to done to keep prices under control, adding that Labour should follow “the path of the previous Conservative government”.

He added: "The Chancellor must not use this data as an excuse to break her promises and hike up taxes - tax rises she had planned all along."

Jeremy Hunt (BBC)

The Lib Dems said the figure must not lead to an increase in the cost of train tickets.

Lib Dem Treasury spokesperson Sarah Olney said: "Across the country, commuters have seen their train ticket prices soar, whilst their services are constantly delayed or cancelled, creating endless disruptions to people’s journeys.

"It will be a slap in the face for commuters if ticket prices increase again next year, forcing millions to spend more on services that simply aren’t up to scratch. That is why the Liberal Democrats are calling to freeze railway fares to help commuters keep more money in their pocket."

July’s inflation figure is traditionally what annual rail fare rises are based on.

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