Rt Hon Chris Philp MP is Shadow Leader of the House of Commons, and a former Technology, Home Office and Justice Minister
In today’s budget we will finally discover the truth about this Labour Government.
So far, all we have had are half-truths, evasions and downright lies. But when the Red Book is published, with the impact of each policy measure set out in a neat table, there will be nowhere left to hide. We will discover what they are actually doing.
And what I think we will see is a staggering set of tax increases.
This will confirm what has become painfully clear: that Labour lied about their tax plans during the recent general election campaign in order to win.
During the campaign, they said repeatedly that their plans were fully costed and did not require any tax increases beyond a limited number in the manifesto.
Labour solemnly pledged in their manifesto that they would not raise national insurance – any national insurance. So, if they increase employer’s NI or impose NI on pension contributions today they will break that promise. No one believes their semantic attempts to weasel out based on shifting definitions of “working people”. But don’t take my word for it. Paul Johnson of the independent Institute for Fiscal Studies said that the move would be a “straightforward breach” of the manifesto pledge.
Others feel the same.
The Federation of Small Businesses said it would be “a clear manifesto breach” and will “hit working people”. UKHospitality said it is “a tax on jobs”. The British Chambers of Commerce said it will “hobble growth and lead to businesses having less money to invest” in workers. The Institute of Directors called it “a poll tax on companies” and said that “the costs will be borne by workers.” Even the Chancellor herself said back in 2022 that a rise in employers’ National Insurance “will hit businesses and working people”. A clear breach of that election promise.
The lies went further during the campaign.
Angela Rayner said, “[it’s] absolutely guaranteed we will not raise taxes for working people in this country”. Sir Keir Starmer said, “Let me be absolutely clear, all of our plans are fully costed, fully funded, we will not raise tax on working people, that means no tax rises for income tax, for national insurance, for VAT … there’s nothing in our manifesto that requires us to raise tax”. Rachel Reeves promised, “Everything in our manifesto, and everything in my plans, is fully costed and fully funded and do not require any additional increases in taxation”.
When the Conservatives called out the fact that Labour’s plans demanded tax increases during the campaign, Labour had the gall to call us liars. But they are now doing what they always intended. They are doing what all socialist Governments always do. They are increasing borrowing, increasing taxes and increasing spending. They are ducking the tough choices by avoiding reform of public services to become more efficient and they are avoiding the welfare reform needed to save money.
But this is not just about Labour’s election dishonesty. These tax increases will damage working people, damage businesses, damage the self-employed and damage entrepreneurs. Jobs will be lost, wages will be lower and some businesses will close or move.
In a BBC radio phone-in recently, I spoke to a man who is closing down his business and leaving the country because of the high taxes and increased regulation proposed by this Labour Government. Another man phoned in to say he was closing his firm down too. This Government is driving businesses to close and making successful people leave the country.
To compound this, the Budget comes on top of Labour’s new employment and trade union bill, which the Government’s own analysis already shows will cost businesses up to £4.5 billion a year to implement, with one in six businesses saying they will respond by cutting staff numbers.
No wonder they didn’t want to own up to their plans in the election campaign – because they knew people would not vote for them.
They were also lying when the Chancellor a year ago ruled out changing the UK’s fiscal rules. She said they were, “Not going to fiddle the figures.” If she does now change the rules and borrow more – potentially £50 billion more – this is likely to drive up the cost of Government borrowing and therefore the cost people’s mortgage payments. She should have disclosed these plans during the general election – instead of dishonestly denying that any such plans existed – and we could have had a proper debate. Instead, she just lied.
We must hold Labour to account for their dishonesty and for the choices they have made. Their claims about a ‘black hole’ have been comprehensively debunked, and it is shameful that Rachel Reeves appears to have coerced the OBR into opining on the matter. About half of the supposed black hole relates to above-inflation public sector pay increases – for example for train drivers – without any efficiency improvements attached to them. These inflation-busting unconditional pay rises are a choice made by the current Labour Government – so they can hardly blame the previous Conservative administration for that.
Rachel Reeves did accidentally tell one truth in June when she admitted, “we’ve got the OBR now” explaining, “you don’t need to win an election to find out [the condition of public finances].”
The truth is that the British economy grew at the fastest rate in the G7 earlier this year, we have the second lowest debt as a percentage of GDP in the G7, we left inflation at the target 2% level despite recent global pressures and unemployment at 4% was half what we inherited in 2010.
Labour has no excuse. They lied to the British public during the election by pretending there were no substantial tax increases coming in order to win votes.
Now it turns out there will be, and a lot of people will regret ever voting Labour.
The post Chris Philp: Labour lied to the British public in order to win votes appeared first on Conservative Home.
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Author: Chris Philp MP
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