Keir Starmer has been promising ‘no surprises’ on tax in the Labour manifesto. At first glance, he has – technically – delivered on that. There is nothing new on tax in today’s manifesto: the hikes already announced were included, and the pledge not to raise income tax, National Insurance, VAT or corporation tax were there too.
The surprise, then, is what isn’t included. There is lots of commentary on tax (attacks on Tory ‘unfunded tax cuts’, getting better ‘return for taxpayers’). But there is no comment on any other specific tax. In other words: a few tax hikes have been ruled out, and all the others are being left on the table for Labour to consider, when the party wins the election next month.
This is not, of course, how Keir Starmer and his shadow ministers have been framing the debate. The strong implication from Starmer, Rachel Reeves and others is that the tax hikes Labour has already announced are the full scope of what they are considering. In her first big speech of the election, Reeves insisted in the Q&A that a larger windfall tax, VAT on private school fees, and changes to the non-dom tax code and private equity bonuses were ‘the sum of the tax changes that’ Labour was ‘bringing in’. Starmer has suggested the same: that ‘none of the plans that we’ve drawn up, nothing in our manifesto, is going to require us to raise taxes.’
So, why not state this explicitly in the manifesto? Why keep these questions over most taxes – sin taxes, council taxes, inheritance tax, the list goes on – unanswered? Last night during the Sky News debate, Beth Rigby pressed Starmer on what he might do on capital gains tax. ‘That is not in our manifesto,’ he insisted, as if the idea that Labour might announce any more tax rises was preposterous. Indeed no hike is mentioned in today’s manifesto – there is no mention at all (apart from the private equity change, already announced). That doesn’t rule out a hike – it keeps it all in play.
Based only on the figures that Labour has published today, The Spectator’s data hub calculates that the tax burden would rise under a Labour government to its highest level on record. Today’s manifesto would see taxes as a share of GDP rise to 37.4 per cent by 2028-29, surpassing the post-war peak of 37.2 per cent. This compares to the Office for Budget Responsibility’s most recent forecast of 37.1 per cent, and the Tory manifesto, which would see the burden rise to 36.7 per cent.
So both major parties will be increasing the tax burden, with the Conservative manifesto offering up £17 billion worth of tax cuts to see this happen at a slower rate. Of course, unlike the Tories, Labour have not insisted they are ‘cutting taxes’ in their manifesto. Rather, they have acknowledged they are raising specific – and in the grand scheme of things, very small – taxes, so it is not as surprising that the overall burden would rise.
But this only includes what has been published. And there seems to be a lot missing the Labour manifesto: not just on tax plans, but on its spending plans. If the party is as serious as it says about using Great British Energy as an investment vehicle – if it really plans to transform the NHS – there is surely a lot more detail in those plans than what’s been published today. And they’re likely to involve quite a bit more money, too. Labour’s manifesto mission to ‘kickstart economic growth’ will be key for securing more tax revenue. If that fails (their plans to get that growth are largely based in growing the state), what lever would the party pull? Today’s document rules very few out.
This manifesto is strong evidence that Starmer and his shadow ministers are very confident in their prospects. If you think you’re going to find yourself in No. 10 next month, regardless of what happens in the next few weeks, you can keep things vague – and your options open. Even if this frustrates voters (Starmer was heckled by the Sky audience last night when he tried to pivot away from tax questions to his upbringing), the risk is not big enough that you fully reveal your plans for governing. In a different election, this could have real consequences for a party. In this election, it probably won’t.
Comments