Starmer commits to reversing Truss’ cut to 45p rate of Income Tax
Sir Keir Starmer has vowed to reverse the government’s decision to cut the 45p top rate of Income Tax for the UK’s biggest earners if Labour wins the next election.
The Labour leader also said he would keep Liz Truss’ 1p cut to the 20p basic rate of Income Tax.
Chancellor Kwasi Kwarteng announced the UK’s largest package of tax cuts in 50 years on Friday in a mini-Budget that rocked markets.
The top rate of Income Tax was cut from 45p to 40p, this year’s National Insurance rise was scrapped and a planned increase in Corporation Tax for the most profitable firms was cancelled.
A cut to the basic rate of Income Tax from 20p to 19p was also brought forward to 2023 instead of 2024.
The pound sunk to a 37-year-low against the US dollar and investors fled from Treasury gilts after the announcement, with widespread concerns about the decision to fund the cuts through borrowing.
Starmer told a small event at the annual Labour conference last night that the decision to cut the top rate of tax, for those earning above £150,000 a year, was a “piss-take”.
Speaking to the BBC today, Starmer said: “I do not think that the choice to have tax cuts for those that are earning hundreds if thousands of pounds is the right choice when our economy is struggling the way it is, working people are struggling the way they are and our public services are on their knees. So it is the wrong choice.
“I would reverse the decision that they made on Friday, let’s be absolutely clear about that.”
Labour comes into its party conference after holding strong polling leads over the Tories for most of this year.
It is a far cry from last year’s conference season when Boris Johnson looked dominant and Labour was wracked with factional skirmishes.
Labour has now benefited from the cost of living crisis and 10 months of scandal and psychodrama at the heart of the Tory party.
Starmer said there had been a serious change in the party’s mindset this year.
“Something’s happened in the Labour party this year, which is that the hope of a Labour government has turned into a belief of a Labour government,” he said.
“That change, that switch is worth its weight in gold.”