Wednesday 8 July 2020 6:00 am

Labour calls for no tax rises to pay for coronavirus spending

Labour shadow chancellor Anneliese Dodds will urge the government to commit to not raising taxes tomorrow in her response to Rishi Sunak’s economic statement.

Dodds is expected to respond to the chancellor’s mini budget by saying that Labour is “not calling for tax rises – we are calling for growth”.

Read more: Rishi Sunak reveals £2bn unemployment scheme to create hundreds of thousands of jobs

The shadow chancellor is expected demand the Tories’ manifesto promise of a tax triple lock – no rises in income tax, National Insurance or VAT – is fulfilled, despite the government’s ballooning budget deficit.

Sunak’s announcement tomorrow will outline the government’s post-coronavirus economic recovery plan.

The chancellor is expected to announce a £2bn jobs programme for 16 to 24-year-olds, a £3bn green investment package, a stamp duty holiday and a raft of other spending promises.

The news that Dodds will use her response partly to call for guarantees on taxation may come as a surprise, after she told the Mirror that those with the “broadest shoulders” should be forced to help pay for the government’s wide ranging spending programmes.

There has also recent been speculation that Labour would call for a wealth tax to deal with the deficit.

Read more: ‘I’ve never been in a faction’: Anneliese Dodds on her plan to unite Labour under a new economic platform

Dodds’ statement marks a break from the party’s 2019 election manifesto, which proposed the UK’s top tax bracket be slashed from a threshold of £150,000 to £80,000.

She is expected to say: “The Tory manifesto committed to no rises in income tax, National Insurance or VAT and therefore it is for them to set out how any additional spending will be paid for.

“It’s the chancellor’s job to make sure the economy bounces back from this crisis so there is money in the coffers to protect the public finances.”   

The shadow chancellor is also expected to call for an extension to the government’s furlough scheme to provide targeted support for the most vulnerable industries.

The government’s coronavirus wage subsidy scheme will begin to wind down in September and end in October for all sectors.

Dodds is expected to say: “The money sunk into the Job Retention Scheme must not have merely served to postpone unemployment.

Read more: Stamp duty holiday: What does it mean for the UK housing market?

“The scheme must now live up to its name – supporting employment in industries which are viable in the long term.

“And we need a strategy for the scheme to become more flexible, so it can support those businesses forced to close again because of additional localised lockdowns.”

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