Shadow Chief Secretary to the Treasury Pat McFadden tells Times Radio…

“We won’t go into the general election, promising to increase the basic rate of tax for 30 million people. So if the government sticks to this, and brings forward that… one pence reduction next April, then we’re not going to go into the election, pledging to raise it.”

Gross domestic product (GDP) fell by a less than expected 0.2% in December 2021 to equal its pre-coronavirus pandemic level (February 2020). The consensus of economists was that GDP would fall 0.6%. Overall the UK economy recovered by 7.5% in 2021. The slight fall in December can be attributed to output in consumer-facing services falling by 3.0% in the month, mainly driven by a 3.7% fall in retail trade in the face of Omicron.

Pat McFadden, Labour’s Shadow Chief Secretary to the Treasury, responding to this morning’s weak GDP figures is audacious:

“The reality is the way the Government runs our economy is trapping us in a high tax, low growth cycle. Despite government bluster, with their current plans our position is not expected to improve. The latest Bank of England forecast suggests that growth will slow to a crawl next year. That would be the slowest growth of any G7 economy. Rising taxes, rising prices, and a squeeze on wages and living standards sit squarely on the shoulders of the Conservatives.”

Even if the low-tax rhetoric of Labour lacks credibility, it highlights the strategic Tory mistake of putting up taxes on workers and destroying their unique selling point as the party of low taxes. Labour points out that the Bank of England is predicting anaemic GDP growth could be as low as 1.25% for next year. The Tories choosing the high tax, low growth path is an open goal for Labour…

As was predicted a mile off, Labour has begun using the Tories’ own budget to undermine the low-tax USP of the Tories. Shadow Treasury Minister Pat McFadden has, perceptively, laid into the government, pointing out the Tories will no longer be able to credibly claim “tax cuts always magically lead to more revenues”. They can’t even bring out their loved “tax bombshell” posters at the next election…

Despite saying after the budget that now was not the right time for tax rises, Annelise Dodds is gloating about Rishi’s  corporation tax rise; “We welcome the Chancellor’s conversion to our point of view, but we can never get back the £95 billion lost to the Treasury over the last few years from this economically illiterate tax cut.”

Guido predicted in his podcast prior to the election that, economic arguments aside, the political consequences from a budget corporation tax rise would resonate for elections to come and would undermine the argument that lower taxes can bring in higher revenue.

Even George Osborne is being reluctantly critical:

“You are sending a message around the world that Britain is not a very enterprising place to do business”

Labour’s enjoying the ideological surrender that Rishi’s rejection of conservative principles embodies, McFadden was proclaiming the death of low tax Conservative principles last night “Thatchernomics and Osbornenomics, buried in full public view by Rishinomics. No more Laffer curves…”. We did try and warn Rishi…