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Jeremy Hunt accused Labour of telling “a lie” about Tory tax plans as he launched his party’s fightback in the week that saw the starting gun fired for the election campaign.
In an unusually fiery speech, the chancellor claimed that Labour’s attempt to scare voters about the future of the state pension was “disgraceful”.
He also alleged that “the most conservative estimate” had concluded that Sir Keir Starmer’s spending plans would cost £38.5bn, meaning that “Labour will have no choice but to put up taxes further” to fill a £10bn black hole in government finances by 2028-29.
Mr Hunt acknowledged that “difficult decisions” had been needed because of the global financial shock brought about by the Covid pandemic, and said that the war in Ukraine had forced him to increase taxes. However, he insisted that the election “will be framed [by] what the parties want to do about the tax burden”.
He added: “There is a choice. The Labour Party does not want, and a future Labour government 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 budgets.”
He went on: “We understand how important those are when it comes to cost-of-living pressures. Our argument is, this is about the 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 £46bn” pledge to end national insurance.
And, while Mr Hunt said he would gradually bring down national insurance – which he described as “the double tax on work” – 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 £46bn 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 [off] 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 when another poll put his party 23 points behind Labour, and the day after Sir Keir and his top team in effect launched their own election campaign in the target Essex seat of Thurrock.
Shadow chancellor Rachel Reeves told the rally that the “stability” of the economy would be Labour’s top priority – with “Deliver economic stability” being at the top of a list of six “first steps” on Sir Keir’s pledge card.
Labour 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 this claim as “disgraceful”. He branded Labour’s claims “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 the money to pay for other tax cuts might come from, having identified cutting national insurance as his priority to help boost growth.
He declined to give a “cast-iron guarantee” of tax cuts, while insisting that the tax burden would come 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 in 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.”
