Will Labour raise taxes? Sunak accused of lying over Starmer’s ‘£2,000 tax hike’

“Independent Treasury officials have costed Labour’s policies and they amount to a £2,000 tax rise for every working family.” These words uttered by Rishi Sunak during the first TV debate of the general election are not true. 

Throughout his head-to-head with Keir Starmer at the ITV event on Tuesday (4 June), Sunak repeatedly referenced analysis by Treasury civil servants showing an alleged £38.5bn black hole in Starmer’s spending plans, which he said would lead to a £2,000 tax bill for each working household.

It seems clear the Tories were rolling out what they hoped would be a major line of attack for the remainder of the election campaign. But within hours it had been proven false.

First, energy secretary Claire Coutinho conceded on the Wednesday (5 June) morning media rounds that this alleged £2,000 tax rise from Labour would actually be spread over four years.

Then – and this is the real kicker – the BBC produced a letter from the Treasury’s permanent secretary James Bowler to Darren Jones, Labour’s shadow chief secretary to the Treasury, which showed the Treasury did not come up with the costing.

It said: “You highlight that the £38bn figure used in the Conservative Party’s publication [the basis for the £2,000 per household claim] includes costs beyond those provided by the civil service and published online by HM Treasury.

“I agree that any costings derived from other sources or produced by other organisations should not be presented as having been produced by the civil service.

“I have reminded ministers and advisers that this should be the case.”

Starmer had already labelled the claims “absolute garbage” during the debate last night, now the Labour Party has put out a video saying: “Rishi Sunak lied”, and MPs are clamouring to say the same on social media. Of course, this doesn’t necessarily mean this line won’t be believed if the Tories keep using it.

But what you probably want to know is whether Labour are actually going to put up taxes, which they will have to do if they want to avoid drastic public spending cuts.

The Labour Party itself says it will not raise income tax, national insurance or VAT, and will pay for its “first steps in government by making the tax system fairer”.

It says it will do this in three ways – by ending tax breaks for private schools, which exempt them from VAT and business rates, closing ‘non-dom’ loopholes that allow mega rich people living in the UK to avoid paying tax, and introducing a proper windfall tax on the huge profits made by energy companies.