Labour will not raise taxes on working people

Rachel Reeves and Keir Starmer facing each other in front of a turbine.

Labour will not increase income tax, national insurance or VAT. Unlike the Tories, we have been clear about how we will pay for our first steps in government: by making the tax system fairer.

  • Ending tax breaks for private schools, which exempt them from VAT and business rates.
  • Closing the loopholes which allow some ‘non-dom’ mega rich people who live in the UK to avoid paying tax.
  • Introducing a proper windfall tax on the huge profits the energy giants are making.

We will deliver economic stability with tough spending rules, so we can grow our economy and keep taxes, inflation and mortgages as low as possible.

The Tories have hiked taxes

Under Rishi Sunak, the tax burden in the UK is at its highest level in 70 years. Households will be on average £870 worse off under the Tories.

Despite this, public services like the NHS are on their knees.

After 14 years in power, the Conservative Government has failed on the economy, failed on public services and failed on living standards.

Why has tax in the UK risen?

With Liz Truss as Prime Minister, the Conservatives crashed the British economy – and they are now making the British public pay to clean up the mess. 

And while the Tories have piled tax rises on the shoulders of working people and businesses, they are keeping unfair loopholes open, and letting government waste and fraud spiral. 

Now Rishi Sunak is planning on repeating the mistakes of the disastrous Liz Truss mini-budget, with £71 billion worth of unfunded spending pledges.

How Labour will bring stability back to the economy

Labour will ensure that no future government can inflict the devastation on working families that Liz Truss and the Conservatives did.

We will introduce a new fiscal lock, guaranteeing in law that any government making significant tax and spending changes will be subject to an independent forecast from the Office for Budget Responsibility.

Labour will tax fairly and levy a proper windfall tax on the huge profits the energy giants are making, and end the tax loophole which exempts private schools from VAT and business rates.

How Labour will give business the confidence to invest

To bring stability, an incoming Labour government will publish a roadmap for business taxation, setting out our plans on business tax over the duration of the parliament. 

If we expect business to invest in Britain, then tax rates cannot shoot up and down like a yo-yo.

For the period of the next parliament, Labour will also cap the headline rate of corporation tax at its current rate of 25 per cent, the lowest in the G7. 

How Labour will clamp down on tax avoidance

Labour will target raising an extra £5 billion a year by closing the loopholes in Rishi Sunak’s ‘non-dom’ plan and cracking down on tax dodgers.

The gap between the amount of tax owed and what the government collects rose to a staggering £36 billion in 2021/22 – an increase of £5 billion from the year before.

The head of the National Audit Office has said that there is £6 billion a year that could be recovered through a concerted effort on tax avoidance. The Tories are only promising to recover £1 billion a year in outstanding tax debt.

Labour will invest £855 million of additional funding will go to HMRC each year to boost tax income. The plan would raise a net £5 billion a year by the end of the parliament.