Rachel Reeves vowed that there would be no “return to austerity” under a Labour government as she ruled out increases to income tax or national insurance. On the first weekend of the general election campaign, the shadow chancellor said she and Keir Starmer wanted taxes on working people to be lower.
Pressed on how Labour would fund public services, Reeves ruled out raising income tax or national insurance and insisted that there would be no “unfunded proposals” in the party’s election manifesto.
Speaking on the BBC’s Sunday with Laura Kuenssberg, Reeves said: “I don’t want to make any cuts to public spending, which is why we’ve announced the immediate injection of cash into public services.
“So that money for our NHS, the additional police – 13,000 additional police and community officers – and the 6,500 additional teachers in our schools, they are all fully costed and fully funded promises, because unless things are fully costed and fully funded, frankly, you can’t believe they’re going to happen.”
Pressed repeatedly on her tax plans, Reeves said: “What I want and Keir wants is taxes on working people to be lower, and we certainly won’t be increasing income tax or national insurance if we win at the election.”
She added: “There’s not going to be a return to austerity under a Labour government. We had austerity for five years and that is part of the reason why our economy and our public services are in a mess today.
“In the end, we have to grow the economy. We have to turn around this dire economic performance.”
She said the party would raise money to fund its pledges by introducing VAT on private school fees, increasing tax on private equity bonuses, extending the windfall tax on energy companies’ profits, and cracking down on non-doms and tax avoidance.
The shadow chancellor also defended Labour’s plans to end fire-and-rehire practices after Unite criticised the party for excluding an outright ban from the final version of its workers’ rights package. The union’s secretary general, Sharon Graham, said the plans now had “more holes than Swiss cheese”.
Reeves said she was “sorry that Sharon feels like that”, but insisted that Labour retained the support of trade unions for “the biggest ever extension of workplace rights that’s ever been introduced”.
“We will end fire-and-rehire, which has seen companies … sack all their staff and then try and bring them back on worse contracts. That is deplorable and we will not allow that to happen,” the shadow chancellor said.
Reeves stressed that fire-and-rehire would be allowed only in very specific cases of restructuring. “When a company’s facing bankruptcy and there is no alternative, they will have to consult with their workers and their trade unions. Those are very, very limited circumstances,” she said.
In the same interview, Reeves declined to say whether Labour would end the two-child benefit cap and refused to put a timetable on the party’s commitment to increase defence spending to 2.5% of GDP.
