Follow the example of Welsh Labour, Starmer tells Sunak ahead of the Budget

Keir Starmer is urging Boris Johnson and Rishi Sunak to follow the example of the Welsh Labour government in their Budget this week. Ahead of a virtual visit to Wales this morning on St David’s Day, the Labour leader highlighted analysis showing that the devolved administration has supported over 165,000 jobs in the crisis. Starmer has urged the UK government to adopt a similarly targeted approach to support. The Welsh administration capped its Covid business rates relief, for example, making those with properties with a rateable value over £500,000 ineligible. This freed up £100m for its Economic Resilience Fund and enabled grants to 2,000 small businesses. The visit via Zoom this morning forms part of Welsh Labour’s ‘Spring Forward’ – the party and First Minister Mark Drakeford have used the online series of events to set out the grounds on which Labour will fight the Senedd election in May.

Sunak is facing additional pressure not to go ahead with tax increases on Wednesday. He is thought to be preparing to propose an increase from 19% to 25% for corporation tax. The Chancellor is also reportedly considering an effective increase to income tax by freezing the point at which people start paying the basic rate of income tax at £12,500, and the threshold at which they begin paying the higher 40p rate at £50,000. But leaks this morning from the Office for Budget Responsibility forecasts, due to be published with the Budget, have suggested the Covid vaccine will spur a faster recovery than expected, requiring few tax rises.

The UK Labour leadership is resisting pressure on its own side to shift its position on corporation tax. Anneliese Dodds told viewers on Sunday that Labour would “look carefully” at a “long-term plan for getting our country to a better place on corporation tax” but warned against immediate tax increases. Jonathan Reynolds was out this morning on the broadcast round reiterating Labour’s line. The Shadow Work and Pensions Secretary argued that the Chancellor should show nothing but an “unrelenting focus on jobs” at his economic statement later this week and described the prospect of raising corporation tax during the pandemic as “economically illiterate”.

Dodds is set to give a speech to Bloomberg at 10.30am, calling on Sunak to provide a “responsible plan that puts us on the path to a better, more secure future” in the Budget. She will reiterate her demand that the Chancellor reverse his “triple-hammer blow” to families with the cut to Universal Credit, council tax increases and the public sector pay freeze. She will also describe what she calls the “Sunak effect” on the economy, stressing the connection between the Chancellor’s handling of the furlough scheme and increases in planned redundancies. The Shadow Chancellor will highlight that in the three months up to November, during which Sunak was insisting on winding down the support, redundancies hit a record-high of almost 40,000.

There has been plenty going on in the labour movement this weekend for readers to sink their teeth into. Labour MSP for Glasgow Anas Sarwar was elected to succeed Richard Leonard as leader of the Scottish Labour Party on Saturday. The ex-MP and former deputy leader won 57.56% of the vote overall – 61.21% of party member votes and 49.31% of votes cast by affiliate supporters. Rival candidate Monica Lennon secured 38.75% of member votes and 50.64% from affiliates. Elsewhere, activists were joined by Rachel Reeves, Andy Burnham, Sadiq Khan, Tracy Brabin, Jamie Driscoll, Nick Forbes and others to discuss English devolution at the English Labour Network online conference. You can read the full write-up here.