Labour opened the door to a tax raid on middle-class workers yesterday, with one minister saying only those on ‘modest incomes’ would be spared.
The party looks set to launch a fresh tax grab this autumn, having refused to rule out extending stealth taxes or a levy on wealth.
Yesterday Transport Secretary Heidi Alexander again failed to deny that Labour is looking to hike taxes, but said the Government would be guided by ‘fairness’.
She told Sky News that Cabinet ministers did not ‘directly’ talk about the idea of a wealth tax during an away day at the Prime Minister’s Chequers country estate on Friday.
But she added: ‘I think your viewers would be surprised if we didn’t recognise that, at the Budget, the Chancellor will need to look at the [Office for Budget Responsibility] forecast that is given to her, and will make decisions in line with the fiscal rules that she has set out.
‘We made a commitment in our manifesto not to be putting up taxes on people on modest incomes, working people. We have stuck to that.’
Pressed on whether there would be tax rises this autumn, she refused to speculate but said: ‘When it comes to taxation, fairness is going to be our guiding principle.’
Labour opened the door to a tax raid on middle-class workers yesterday, with one minister saying only those on ‘modest incomes’ would be spared (Pictured: Rachel Reeves)
Yesterday Transport Secretary Heidi Alexander again failed to deny that Labour is looking to hike taxes, but said the Government would be guided by ‘fairness
Labour’s general election manifesto promised not to increase taxes on ‘working people’, including national insurance, income tax or VAT, but ministers have struggled to define what a ‘working person’ is ever since.
Chancellor Rachel Reeves has refused to rule out tax rises at the Budget since the Government was forced into a humiliating U-turn on welfare reforms that would have saved £5 billion.
Fiscal watchdog the OBR last week warned that the UK’s state finances are on an ‘unsustainable’ path due to a raft of public spending promises the Government ‘cannot afford’ in the longer term.
Meanwhile, economists have warned that Ms Reeves’ fiscal headroom could be eroded by unexpected economic turns.
She is under pressure from Labour MPs, unions and senior figures to impose a wealth tax in order to balance the books.
She could also increase business rates for department stores and supermarkets in a bid to raise £1.7billion, the Telegraph reported.
Ms Reeves will tomorrow unveil plans for a Thatcher-style ‘Big Bang’ in the City by slashing red tape.
In her Mansion House speech, she will pledge to reduce excessive regulation to make the UK ‘the best place in the world to do business’.
But last night Shadow Chancellor Mel Stride said Labour ‘is sending investors running’ because they know ‘tax rises are coming’.
