Starmer Vows No Tax Surprises in Labour’s Election Offer

(Bloomberg) -- Keir Starmer pledged Labour’s election manifesto will contain no new tax rises beyond those the opposition has already announced, as the party leader seeks to defend a wide poll lead that puts him on course to entering Downing Street as UK prime minister next month.

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“There won’t be any surprises on tax” in the manifesto, Starmer told Sky News on the campaign trail on Saturday as he promoted his party’s offering to small businesses. “All of our plans are fully costed, fully funded, and none of them involving tax rises over and above those that we’ve already set out.”

With the July 4 general election less than four weeks away, Starmer and his shadow chancellor, Rachel Reeves, have been careful to avoid extravagant promises on tax and spend that could backfire after the election. Instead, they’ve matched promises from the ruling Conservatives not to raise income tax, national insurance, or value added tax on sales — the Treasury’s three biggest revenue raisers.

Labour leads the Tories by more than 20 points, according to Bloomberg’s composite poll, a rolling 14-day average using data from 11 polling companies, and two large-scale seat-by-seat analyses this week put them on course for a historic majority next month, with the Tories slipping to their biggest defeat in more than a century.

In other UK election developments:

  • Labour vowed to expand prisons to accommodate 20,000 more inmates by easing planning rules, and boost efforts to link offenders to training and jobs to drive down re-offending

  • The Tories reiterated plans to lower welfare costs by cutting the numbers of those able to receive benefits for disabilities and mental health problems, and to establish programs to help those with milder conditions continue to work. They said the plans would save £12 billion a year within five years

  • Reform UK leader Nigel Farage said membership of his party passed 40,000, up from 30,000 last weekend. “We’re the real opposition now” he told the Sunday Express

  • The Liberal Democrats pledged to increase the allowance paid to those who care for dependents with illnesses and disabilities, as well as fund an extra 1,000 staffed hospital beds

  • A Savanta poll for the Sunday Telegraph gave Labour a 20-point lead over the Tories, up six points from earlier in the week. An Opinium survey put Labour’s lead at 18 points, down two on its last poll

Both Labour and the Conservatives plan to publish their manifestos next week, outlining their full policy offering to voters. After leading Labour officials signed off on their document on Friday, Starmer told Sky that he wanted the party’s manifesto to “be a story — as it is — about the future of the country, and to provide the winning platform for that election.”

Labour’s other promises on tax include a vow not to raise corporation tax and plans to end preferential tax treatment for non-domiciled residents, private schools and private equity firms, as well as extending a windfall tax on oil and gas giants.

That still leaves questions over how it would balance the books given the national debt is at levels last seen in the early 1960s and growth is sluggish. Bloomberg Economics forecasts a £45 billion ($57 billion) fiscal hole faces any future government. The Institute for Fiscal Studies, meanwhile, said earlier this year that current spending plans coupled with protected budgets for health care, defense, education and overseas aid entail an £18 billion cut in real terms for unprotected departments by the 2028-29 tax year.

(Updates with details of Tory, Labour proposals in bullet points after fourth paragraph.)

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