| 21 April 2024, Sunday |

Britain’s Labour pitches itself against tax cuts for the wealthy

As he made a plea for power at his party’s annual conference on Sunday, Keir Starmer, the leader of Britain’s Labour Party, promised to reverse the elimination of the top rate of income tax, claiming tax cuts for the rich will not produce economic development.

After the government repealed the top rate of income tax in a mini-budget, Starmer, who has led Britain’s largest opposition party for the previous two years, said he would reinstate it to 45%.

Labour suffered a crushing defeat in the last general election in 2019 and Starmer is under pressure to assert himself as the prime minister-in-waiting with clear policies to challenge the ruling Conservatives.

The selection of Liz Truss as new Conservative leader on a tax-cutting agenda earlier this month has immediately widened the ideological gulf between Britain’s main parties.

Finance minister Kwasi Kwarteng last week unleashed historic tax cuts, ditched the cap on bankers’ bonuses and announced huge increases in borrowing in a fiscal statement which sent markets into a tailspin.

Starmer said a move by Kwarteng to cut the top rate of tax was “hugely divisive” and unfair because it handed someone earning 1 million pounds ($1.09 million) a 55,000 pound tax cut and would not trickle down to the rest.

“I would reverse the decision they made,” Labour leader Starmer said. “It is hugely risky, it is hugely divisive, and I would reverse it.”

However, Starmer said a Labour government would not reverse the government’s decision to cut the basic rate of income tax to 19% from 20%, saying that tax cut would benefit working people.

  • Reuters