Labor threatens 'difficult' era of spending cuts and tax rises

What is the news?

The British public must prepare for "difficult" years ahead as the government grapples with the "enormous" aftermath of the Covid pandemic and war in Ukraine, Labor leader Sir Keir Starmer has warned.

The Shadow Chancellor, Rachel Reeves, said the next election would be a "choice" between "fair" Labor tax rises and "unfair" Conservative cuts to public services.

What would Labor do?

• Reintroduce the 50p top rate of income tax for those earning more than £125,000.
• Increase corporation tax from 19p to 26p in April 2023 and scrap the planned 1p cut to the basic rate next year.
• Increase inheritance tax on properties worth more than £500,000.
• Impose a one-off "windfall tax" on oil and gas companies, as well as a new "fairer tax system".
• Cut business rates for small businesses and review public spending to "make sure every pound is spent wisely".

What have the Conservatives said?

The Conservatives have accused Labor of planning to "clobber" working families and businesses with tax rises, while failing to properly address the cost of living crisis.

Chancellor Rishi Sunak said Labor's plans would "strangle" the economy and "cost jobs".

Conclusion

The political debate over tax and spending is likely to dominate the run-up to the next general election, which is due to be held in 2024.