Jeremy Hunt has admitted millions of Brits will still pay more in income tax as Tory attacks on Labour swiftly backfired.
The Chancellor tried to declare war on his rival by claiming to The Sun that Shadow Chancellor Rachel Reeves was secretly planning to hike the main rate of VAT. The suggestion was immediately denied – and comes only two days after Ms Reeves told an event in Derby that Labour would not impose any further tax rises beyond what they have already announced.
And Mr Hunt’s attempts to suggest Labour were going to hike taxes unravelled spectacularly during an interview on BBC Radio 4’s Today programme, where he was forced to admit that the Tories were effectively putting taxes up themselves.
Income tax thresholds were frozen by Rishi Sunak in 2021 and then extended by Jeremy Hunt in 2022, which means more people are being pushed into paying higher rates due to inflation. Some 4 million people will pay income tax for the first time, while 3 million will pay the higher rate by 2028, according to the Office for Budget Responsibility.
Presenter Nick Robinson said: “You’ve just said you are not increasing income tax. You are increasing income tax until April 2028. Are you now going to reverse that or did you misspeak just now?”
Mr Hunt said: “I took very difficult decisions yes to increase taxes and now in my my budget and the autumn statement last year, I started to bring them down. Have I been able to cancel out all those tax rises? No, but I had to make that commitment so I can absolutely undertake that the threshold freeze that we introduced until 2028 will not continue after that. “
The presenter pointed out that the Tories also broke their 2019 manifesto commitments not to hike income tax, national insurance or VAT – following the pandemic and the war in Ukraine – taking the tax burden to the highest level since the Second World War.
Asked if it the tax row was a “political game” that was a “meaningless to voters”, Mr Hunt said: “It’s not, for the reasons you said. In the last four years we have had something we haven’t had in our lifetimes before which is not one but two massive global economic shocks in quick succession.”
The Tories have tried to turn the screws on Labour by attacking them over a secret plan to increase VAT – which has been denied by Shadow Chancellor Rachel Reeves.
Mr Robinson told the Chancellor: “You attack the Labour Party this morning and say they’ve got a secret plan to increase VAT. Which party put VAT up to 15%? Which party then put it up to 17.5%? Which party then increased it to 20%?
“Every increase in VAT there’s been in your political lifetime – Thatcher, Major and Cameron – they were increased by Conservative governments.”
Mr Hunt replied: “I am not pretending that there haven’t been times when Conservative governments haven’t put up taxes. Here is the real choice in this election campaign: a Conservative government that wants to bring down the tax burden … a Labour government will keep taxes as they are, and in fact we believe they will need to increase taxes.”