Jeremy Hunt accused Labour of telling “a lie” about Tory tax plans as he launched his party’s fightback in a week where the starting gun on the election campaign was fired.
In an unusually fiery speech by the chancellor, he claimed Labour’s attempts to scare voters about the future of the state pension was “disgraceful”.
He also alleged that “the most conservative estimate” of Keir Starmer’s spending plans would cost £38.5billion and means “Labour will have no choice but to put up taxes further” to fill a £10billion black hole in government finances by 2028/29.
Mr Hunt acknowledged that “difficult decisions” are needed because of the global financial shocks of the covid pandemic, and that war in Ukraine had meant he had been forced to increase taxes. However, he insisted that the election “will be framed about what the parties want to do about the tax burden”.
He added: “There is a choice that the Labour Party does not want to… cut the tax burden – a future Conservative government will. That is the big choice in British politics and our argument is this isn’t just about family budget.”
He went on: “We understand how important those are when it comes to cost-of-living pressures.
“Our argument is this is about future growth of the economy, because we can see looking around the world that more lightly-taxed economies have more dynamic private sectors, they grow faster and, in the end, that is more money for precious public services like the NHS.”
Labour hit back saying that Mr Hunt wanted “to distract attention” from his “unfunded £46billion” pledge to end national insurance.
And, while Mr Hunt said he would gradually bring national insurance – “the double tax on work” – down, he was unable to give a timeframe or commit to any other tax cuts including raising the thresholds for higher rates of income tax.
A Labour spokesperson said: “This is another desperate attempt by the Tories to deflect from their £46billion unfunded tax plan that could lead to higher borrowing, higher taxes on pensioners or the end of the state pension as we know it.
“All of Labour’s policies are fully costed and fully funded. Unlike the Conservatives who crashed the economy, Labour will never play fast and loose with the public finances.
“Jeremy Hunt would be better spent getting Rishi Sunak to confirm the date of the election, rather than putting out any more of these dodgy dossiers.”
Mr Hunt’s speech came on the day another poll put his party 23 points behind Labour and the day after Sir Keir Starmer and his top team effectively launched their own election campaign in the target Essex seat of Thurrock.
Shadow chancellor Rachel Reeves told the rally that “stability” for the economy would be Labour’s top priority and it was top of a list of six “first steps” on Sir Keir’s pledge card.
They warned that scrapping national insurance would mean a reduction in the state pension or a rise in the retirement age to 75.
Mr Hunt described these claims as “disgraceful”.
He branded Labour’s claims as “a myth” and when pushed further, he added: “It is a lie, fake news, an absolute disgrace by trying to scare pensioners about a policy that is not true.”
However, the chancellor struggled to identify where other tax cuts might come from having identified national insurance as his priority to help boost growth.
He declined to give a “cast-iron guarantee” of tax cuts, while insisting the tax burden would go down under a future Conservative government.
Mr Hunt said: “If you’re saying can I look into a crystal ball and predict what is going to happen in the world in the next five or 10 years, and therefore give you a cast-iron guarantee of when we will be able to reduce the tax burden and to what level, the answer is of course I can’t, and it would be irresponsible to do so.”
But he also signalled a desire to cut taxes further in the autumn, following the 2p cut to national insurance at the spring budget, and to scrap national insurance altogether in the future.
“If we can afford to go further responsibly to reduce the double tax on work this autumn that is what I will do,” he said.
“Because over time we make no apology for wanting to keep cutting the double tax on work until it is gone, but only when we can do so without increasing borrowing and without cutting funding for public services or pensions.”
