Labour’s secret tax hikes will be merciless

Wes Streeting’s admission yesterday – that Labour has spending plans beyond what it promised in its manifesto – ought to blow open the doors and prompt a proper examination of what exactly a Sir Keir Starmer government would do.

On television, the shadow health secretary admitted that the Labour manifesto is not the party’s real plan for government. This ought not to be a surprise: Starmer has form – during his own leadership campaign – of making promises only to junk them as soon as he wins. The manifesto is a document only the credulous could believe.

Labour promises a revolution in the NHS, funded by closing a couple of tax loopholes it says will be easily done. It claims it will decarbonise the power grid by 2030 – an objective said to be impossible by experts – with a fifth of the budget it originally set for itself to do the job.

Even the tax rises that Labour does admit to mean, based on official forecasts, it would take Britain’s overall tax burden to the highest percentage of our national wealth ever: more even than the previous record set by Clement Attlee in 1948.

But of course, its published plans are make-believe. As Paul Johnson of the Institute for Fiscal Studies says, “Labour’s manifesto offers no indication that there is a plan for where the money would come from” to finance its promises. This is because, as shadow cabinet leaks reported in The Guardian confirm, Starmer and his shadow chancellor Rachel Reeves plan an emergency budget this autumn.

In that budget, the party will claim the finances are far worse than feared – even though all the data it needs is already published and freely available – and put up a dozen new taxes. According to a source familiar with the plan, Reeves wants to “take a kitchen sink approach in order to increase tax income”. The source admitted: “This is not what they are presenting the public with right now.”

This is straight from the Labour playbook. Starmer and Reeves boast of how they have learned from the New Labour years. In 1997, Tony Blair and Gordon Brown had already agreed to abolish tax relief on dividends received by pension funds, but they kept the plan out of the manifesto and bullied the Guardian editor to stop him reporting it. In 2001, they refused to tell the country of their plan to hike national insurance contributions to fund extra health spending.

Now Starmer and Reeves refuse to tell us their secret tax plans at this election. Labour has promised not to put up income tax, national insurance contributions or VAT. But it claims – as with the imposition of VAT onto school fees – that the removal of a relief is not a tax rise. So any existing tax reliefs – on pension contributions, for example, or business taxes – are out of the scope of the pledge.

Labour has been remarkably unsubtle about its approach to taxing pensions. The refusal to back the Conservative “triple lock plus” policy – which pledges to stop the basic state pension being dragged into income tax by linking its value to pensioners’ personal tax allowances – can only mean that it plans to tax the state pension itself. Indeed, it suggests that it will freeze income tax thresholds completely throughout the next five years – even though its spokesmen and shadow ministers continue to claim that “people are not going to be paying more income tax”.

Then there is the question of applying capital gains tax to family homes. First, Angela Rayner, Labour’s deputy leader, refused to rule out doing this during the ITV debate last week. And then, Sir Keir Starmer did the same during his BBC interview with Nick Robinson. On Saturday, Starmer’s campaign director, Morgan McSweeney, “liked” a social media post saying Labour should “raise capital gains tax” to bring £15 billion into the Treasury. No doubt Starmer will claim, as he does with school fees, that this would not be a tax rise, for technically it would be the removal of a tax relief.

For this is the logic of Labour: the instinct of Starmer and his party. Anything that is not taxed is treated with suspicion – a privilege to be removed by the state. And so everything will be fair game. Business taxes, pension taxes, driving taxes, property taxes, green taxes on energy bills – they are all in Labour’s sights. It even wants to enshrine tax and spend and redistribution in law, imposing on public bodies a legal duty to reduce inequality. This was dangerous enough when it was first mooted in 2010, during the passage of the Equality Act. In the age of critical race theory and the pursuit of “equity” it will lead to catastrophic – one might even say systemic – unfairness.

And this is the lesson of Labour’s manifesto and its wider campaign. Listen very carefully to what it says. Pay close attention to what it does not say. And try to understand not just the policies put forward, but the instincts and motives that guide them. We cannot know what will happen next year, let alone what might happen in the year 2029. In the next five years, we will face economic challenges, geopolitical threats, and the dangers of terrorism. Key risks include another pandemic, the loss of telecommunications cables, and the disruption of food or energy supplies.

How a government responds to the unknown is informed by the instincts of its leaders. Starmer fought to overturn the Brexit referendum, campaigned to make Jeremy Corbyn prime minister, sought to block the deportation of foreign criminals, wanted Covid lockdowns to go on for longer and at greater expense, backed divisive critical race theory and discredited gender ideology, and in response to Black Lives Matter, chose to take the knee for the cameras.

The polls suggest we are heading for a massive Labour majority. If it gets it, we know what to expect. It is clear, not just from what Starmer says – and what he does not – but from his instinctive response to every challenge. There is no problem to which his response is not higher taxes, more government, and legalistic interventionism. These are not the ingredients for us. We will need a strong Conservative Party to stand up to him.