Rachel Reeves has vowed there will be no “return of austerity” in a Labour-led government, and she ruled out any increases to national insurance or income tax. The shadow chancellor and Keir starmer both wanted lower taxes for working people on the first weekend in the general election campaign.
Reeves, when asked how Labour will fund public services in the election manifesto, ruled out increasing income tax and national insurance. He also insisted there would be “no unfunded proposals”.
Reeves stated on BBC’s Sunday With Laura Kuenssberg: “I do not want to cut public spending. That’s why we announced an immediate injection of money into public services.
“If you don’t have a full costing and funding, it’s hard to believe that things will happen.”
Reeves was repeatedly pressed on her tax plan. She said: “I want to lower taxes for working people, as does Keir, and if we win the election, we won’t increase income tax or national security.”
She said: “There won’t be a return of austerity with a Labour-led government. Our economy and public services are in trouble today because we had five years of austerity.
We must grow the economy. “We have to reverse this poor economic performance.”
She said that the party will raise money for its pledges through the introduction of VAT on private school tuition, an increase in tax on private equity bonus, the extension of the windfall tax to energy company profits, as well as a crackdown on non-doms.
Shadow chancellor also defended Labour’s plans to stop fire-and-rehire after Unite criticised Labour for not including an outright prohibition in the final version its workers’ rights package. Sharon Graham, the union’s secretary-general, said that now, “the plans have more holes than Swiss cheese”.
Reeves expressed her “sorry” that Sharon felt that way, but she insisted that Labour had the support of all trade unions to “the largest ever extension of workplace right that has ever been introduced”.
“We will stop fire-and-rehire. This has seen companies… sack their entire staff and then attempt to bring them back with worse contracts. This is deplorable, and we won’t allow it to happen,” said the shadow chancellor.
Reeves emphasized that firing and rehiring would only be permitted in very specific restructuring cases. When a company is facing bankruptcy, and there’s no other option, it will need to consult its workers and trade unions. “Those are very, limited circumstances,” said she.
Reeves refused to answer whether Labour would lift the cap on benefits for two children and refused to give a timeline to the party’s pledge to raise defence spending from 2.5% to 2.5%.
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