Rachel Reeves may have been getting attention for her accusation that the government is ‘gaslighting’ the public over the state of the economy, but this afternoon she ended up being accused of spreading fake news. The ‘gaslighting’ line came from a speech in the City of London this morning, after which Reeves then popped up at Treasury questions in the House of Commons. She asked a question that both she and Labour leader Keir Starmer have been repeating for weeks now, about the Conservatives’ ambition to abolish national insurance. Labour has badged this as a £46 billion unfunded plan, though, as ever, it is worth pointing out that this is not active policy, but something both Rishi Sunak and Jeremy Hunt have said they want to do in the long-term.
Reeves asked whether Hunt accepted the analysis that income tax would go up by 8p on the pound if he did abolish National Insurance. The Chancellor replied: ‘Which is why it is not our policy.’ It was the most direct engagement with the Labour attack line from a government minister. Up to this point, Sunak and other ministers including Work and Pensions Secretary Mel Stride have only been saying that the policy is a long-term ambition and that they make no apology for wanting to end the ‘double taxation’.
Reeves responded with a recently unearthed memo in the National Archives which showed Nigel Lawson warning Margaret Thatcher against merging income tax with national insurance. Hunt responded that his party wanted to abolish national insurance completely, adding: ‘If Labour’s strategy is to win the election by frightening pensioners with fake news stories, then I would just say that Britain deserves better.’
Labour has made the national insurance policy one of its major attack lines in Commons questions for a good while now. It is one of the few attacks that is about policy rather than the government’s incompetence. It is, as Hunt intimated, designed to put off older voters from backing the Conservatives at the next election, just as the repeated attacks about the impact of Liz Truss’s mini budget on mortgages appear to have had a significant impact on voting in the local elections. The difference between the mortgage and tax attacks, though, is that the former refers to something voters are already experiencing and feeling very viscerally, whereas the national insurance plan is only a future prospect.
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