Once again the No 10 communications operation is breaking down. Starmer told broadcast journalists yesterday night that someone who works and also gets income from shares or property “wouldn’t come within my definition” of a “working person.” Today his spokesman clarified that “a person who holds a small amount of savings in stocks and shares still counts as a working person.” Guido cast his mind back to before 5th July, when Labour made a specific pledge in its manifesto: “Labour will not increase taxes on working people”…
These are the definitions of “working people” the public was given prior to the election:
Compare that to now, days before the budget.
Spot the difference? They did promise change…
Rayner couldn’t explain what Labour meant by “working people” at Deputy Prime Minister’s Questions today. Helpfully, Science Minister Chris Bryant has just come up with a new line on what it means: those badly affected during the cost of living crisis. Bryant clarified on Politics Live just now:
“[Working people] has become a shorthand in political circles for the people who were particularly disadvantaged in the cost of living crisis…that suddenly meant that people had to find an extra £300 a month for their mortgages so those are the people that we didn’t want to hit, so we wanted to say in the general election we don’t want to take more tax from you and that’s what we said.”
Last week, Labour MP Dan Tomlinson claimed that a rise in employer NICs would constitute a new tax on “working people” because someone who owns and runs a business is obviously a “working person.” On Monday, Care Minister Stephen Kinnock was asked whether six-figure earners were working people, to which he refused to answer six times, then conceding that Labour hadn’t worked out what a “working person” was yet. Labour continue to waffle and contradict each other over what “working people” means. Opening the door to tax hikes for all..
Bad news for fans of economic growth this week as the US-based Tax Foundation releases their International Tax Competitiveness Index, which ranks 38 OECD countries on how pro-growth their tax systems are. The UK ranks a shameful 30th place, now lagging behind the likes of Hungary (7th), Czechia (8th), and even Germany (15th). So much for lofty promises of making Britain an “attractive” destination for investors…
Since 2021, our corporate tax competitiveness has nosedived 18 places, thanks to Sunak hiking it to 25% – a rate that’s set to stay. Things are poised to get worse, with the Tax Foundation and Centre for Policy Studies sounding the alarm that Reeves’ upcoming budget could see the UK tumble even further down the rankings to 35th place if hikes in capital gains tax, dividend tax, or the dreaded wealth tax materialise. Just four spots from the bottom, alongside France, Italy, and Colombia. Hardly a prelude to growth…
Daniel Herring of the CPS warned:
“In short, there is a real danger that we could end up with the least competitive and most anti-growth tax system in the OECD. The UK’s ranking shows that the way we raise tax is damaging incentives, getting in the way of innovation and undercutting productivity.”
Right on the money…
Meanwhile, capital is already streaming out of the country, and businesses are fleeing in droves. These latest figures aren’t the siren calls that will bring investors flocking…
MPs and commentators have been arguing this morning over whether a rise in employer NICs would constitute a violation of Labour’s manifesto pledge, which stated:
“The Conservatives have raised the tax burden to a 70-year high. We will ensure taxes on working people are kept as low as possible. Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT.”
The IFS considers that a hike would be a “straightforward breach” of the commitment. Tax expert and Labour activist Dan Neidle has pointed out that all employer NIC costs are transferred to employees. Labour’s defence operation has launched on the Tories’ asking for clarification from Labour on whether employer NICs would rise – an election press release issued post-manifesto. The implication being that the manifesto did not rule it out…
Labour MP and “rising star” Dan Tomlinson clarified on Politics Live just now that a hike would constitute a new tax on “working people” because someone who owns and runs a business is obviously a “working person.” The point decimates Labour’s defence as its pledge on “working people” was cast-iron. Was Starmer’s tool factory-owning Dad not a working person?
Labour Conference is developing a strong anti-media narrative. Starmer’s allies have taken to complaining bitterly about journalists reporting on his and his ministers’ freebie-taking…
At a pro-tax love-in this morning attended by Exchequer Secretary James Murray and a selection of high-tax activists discussed fiscal proposals including more than doubling capital gains tax and imposing additional taxation on the well-endowed. Wealth tax fanatic Arun Advani said he was “optimistic” because the Labour government is “genuinely listening” to his ideas. Which include growth-crushing expansions of existing taxes…
Ex-FT reporter and Labour rising star Yuan Yang MP rounded off the event by claiming that “access to Lobby journalists” is held primarily by vested interests and the majority of reporting on tax issues is “not representative of what people say to me on the doorstep.” She urged Labour activists present to take “action” to combat the media narrative and present the case for higher tax. No doubt those tight new controls on the press will help…
Rumours are swirling of Chancellor Reeves eyeing up a raid on pension tax reliefs, aiming to tighten her grip on hardworking Britons’ wallets. Now the Institute for Fiscal Studies has called for Reeves to reduce the amount that pensioners can withdraw from their pension pots tax-free. As it stands, savers can take out 25% of their pension tax-free up to £268,275, though the tax-happy think tank says this should be reduced to £100,000. Hitting 1 in 5 hard-working retirees’ wallets…
Tax lawyer and senior Labour activist Dan Neidle slammed the idea, pointing out the tax-free lump sum has been a cornerstone of the “deal” that workers have been promised when putting their hard-earned cash into their pensions. It would be yet another policy proving high-tax Labour view the elderly vote as less important. Reeves would be wise to ignore the idea, branded “unethical” by Cut My Tax. Changing the rules half-way through the game isn’t a good look for a party that claims to be one of “integrity”…
Former leader of the SNP in Westminster Ian Blackford told Times Radio why he believes Nicola Sturgeon’s claim that she spent no time in the kitchen and therefore didn’t see any of her husband’s purchases:
“She doesn’t have a passion for cooking.”