Rachel Reeves, the shadow chancellor, has acknowledged that reversing the economic damage inflicted by the Tories over the past 14 years would be a gradual process if Labour were to form a government.
Speaking to the Parliamentary Labour Party on Monday, she criticized Chancellor Jeremy Hunt’s alleged plan to adopt Labour’s non-dom tax proposal and utilize fiscal headroom for a pre-election giveaway, calling it a transparent ploy.
Reeves emphasized that the British people could see through such tactics and that Hunt’s budget would not alter the fact that working people had suffered under Conservative rule since 2010.
Hunt is reportedly contemplating a 1p or 2p reduction in income tax or national insurance to alleviate the financial strain on working households ahead of the upcoming general election.
However, with deteriorating forecasts for public finances, the government is exploring various options to finance these tax cuts, including reforming the non-dom tax status.
This status enables wealthy foreign nationals to avoid paying UK tax on their overseas income or capital gains. Labour’s proposal to reform this tax status has been a significant part of their agenda, potentially raising up to £2 billion.
Hunt’s adoption of this policy could create a challenge for Keir Starmer’s Labour Party, as they would need to identify alternative sources of revenue to finance measures such as improvements to the National Health Service.
The upcoming budget and its implications are likely to be a contentious issue as the parties position themselves ahead of the general election.
