Sir Keir Starmer failed to say exactly how much Labour’s tax plan will cost the economy, despite his attacks on Liz Truss. Being interviewed on BBC Radio 4 this morning, Sir Keir was challenged on the cost of his pledge to maintain Ms Truss’ plans to reduce the basic rate of income tax from 20 to 19 pence. Despite his criticism of the current Conservative Government’s tax plans, the Labour leader himself could not put a figure on how much Labour’s own plans will cost.
He was asked: “Will your plans have the confidence of the market?
“Because some of the things that have spooked the market has been the idea of unfunded tax cuts.
“And you’re agreeing with the Government on some of those tax cuts, particularly on the basic rate of income tax. How will you afford that?”
He replied: “Well, For the last two years, every announcement we have made has been fully costed.
“And we set out fiscal rules at our conference last year which was, we’ll pay for day-to-day spend and we will borrow to invest.”
Sir Keir said Labour was prepared to “inherit a complete mess” from the current Government.
But when he was pushed to provide the “sum” to back up the party’s tax plan, he said: “Well, we wil set out our figures.
“We will set out our rules. We will inherit the situation we’re going to inherit.”
Sir Keir went on to estimate that a Labour Government could get “about £18billion” from cancelling the Conservative Party’s proposed cut in corporation tax, adding that there is “tens of billions of pounds” available from Labour’s proposed windfall tax.
But Presenter Martha Kearney responded: “Okay, that’s money that you’re counting on to be able to spend.
“What I was talking about was how you’re going to be able to afford the tax cut on the basic rate, which is estimated to be about £5bn billion.”
Earlier on the programme, Sir Keir called on the Conservative Government to “fix the problems” they made, saying people are “very, very worried” about the current situation.
This comes as the pound after the pound fell to a record low against the dollar following the Conservative Party’s mini-budget last week.
Meanwhile, borrowing costs reached their highest levels since August 2008 on Monday morning.
US investment bank J P Morgan said the plummeting pound exposed a “broader loss of investor confidence in the government’s approach”.
Meanwhile, Citi said the Chancellor’s tax giveaway, which is the biggest of its kind since 1972, risked causing a “confidence crisis in sterling”.
The Government’s plans include cutting the basic rate of income tax from 20 to 19 percent and abolishing the 45 percent top rate of tax.
The planned corporation tax increase, which was set to rise from 19 percent to 25 percent, will also be axed.
Meanwhile, stamp duty will be cut for homebuyers.
Sir Keir said he would reverse the abolition of the 45 percent top rate of tax, reintroducing the tax band for the highest earners.
But he has pledged to keep the cut to the basic rate of income tax.