Budget 2024: What is Labour’s stance on key Tory claims and policies?

Tom Belger
Picture by Rory Arnold / No 10 Downing Street

Labour leader Keir Starmer has called Chancellor Jeremy Hunt’s 2024 Budget the “last desperate act of a party that has failed”, and dubbed Hunt and Prime Minister Rishi Sunak “the Chuckle Brothers of decline” for suggesting “everything is on track”.

The Chancellor used the Budget to announce a 2p cut to employee national insurance, reform non-dom status, expand child benefit eligibility, extend a cost-of-living support scheme, raised taxes on holiday lets, vaping and tobacco and frozen fuel and alcohol duties.

What Hunt claimed on the economy – and Labour’s response

Hunt began by claiming growth had been higher than large European economies and unemployment and absolute poverty had fallen since the Tories took power in 2010.

The Chancellor claimed the country had “turned the corner on inflation” and will “soon turn the corner on growth”, with inflation halved, debt falling and growth higher than predicted.

Starmer asked: “Who do they actually think feels better off?”

He said the current parliamentary session, which began in 2019, was the first “since records began to see living standards fall”, and called rosy claims about the economy a “sleight of hand” – saying gross domestic product per head has seen the longest period of stagnation since 1955.

He said the country is in a “Rishi recession”, with “taxes at a 70-year high”, productivity flat, mortgages soaring, housebuilding “off a cliff”, worklessness and homelessness up, crime “virtually unpunished”, children unable to see dentists, sewage in rivers and the “national credit card maxed out”.

Labour left campaign group Momentum criticised the idea of a “government credit card”, however, urging Labour to “break with the failed Tory logic of austerity”.

Starmer claimed it was “high time” the Tories admitted how central migration was to their growth plans, unlike Labour’s plans for planning reform, investment in cleaner power or employment rights reform.

Labour released an attack ad on social media during the Budget suggesting Hunt “led the country into recession after [his] party crashed the economy and still tried to tell people they are better off”.

Hunt also included jibes about Keir Starmer’s weight, repeating Lord Mandelson’s suggestion he should lose weight, and about recent questions over deputy Labour leader Angela Rayner’s old house sale.

Tory tax cuts ‘giving with one hand and taking away with the other’

Hunt said the government would help families with “permanent cuts in taxation”, unveiling a 2p cut to employee national insurance rates from 10% to 8% from April 6 and holding out the prospect of potential further cuts in future.

Hunt is “giving with one hand and taking even more with the other”, Starmer said, but pledged Labour would support cuts to national insurance, because it had “campaigned to lower the tax burden for the whole parliament”.

A further Labour attack ad highlights Starmer’s comments in 2022, predicting Tory tax rises would be followed by “utterly cynical” tax cuts just before an election in 2024. Another features Ant and Dec and ridiculed the Tories’ tax cuts pitch “after giving people the highest tax burden in 70 years”.

Josh Simons, director of campaign group Labour Together, called the national insurance cut “at best, just a sticking-plaster” with Britain in recession. Kate Hollern MP said a 2p cut in NI contributions “disproportionately favours high-income households, London, and the South East”, while public services are “starved”.

The Labour leader also pointed out that Sunak as Chancellor had vowed in 2022 to cut the basic rate of income tax from 20 to 19 pence in the pound, a pledge that was in “tatters today”.

Tory non-dom U-turn ‘humiliating’ as Labour hunts alternative revenues

The Chancellor vowed to scrap the non-dom tax relief scheme on overseas earnings, stealing a major Labour policy, but announced a transition scheme for existing non-doms and a new four-year tax relief scheme for those new to the UK.

Labour noted Sunak once approvingly quoted a warning that scrapping non-dom status would “end up costing Britain money”, and questioned how much could be lost in revenue due to the transition window.

One shadow frontbencher told LabourList the non-dom U-turn is “humiliating” for all the Tories who’ve attacked the policy, and Labour work is “well underway” to find alternative revenue sources for commitments it had planned to fund by closing the tax loophole. “So their little wheeze has made them looking completely stupid without causing Labour any real difficulties.”

Labour MP Imran Hussain said: “Which of the Tory MPs who spent all that time defending non-dom status that helps the richest avoid paying tax will now have a sudden change of heart and get up today to back scrapping it?”

Andrew Harrop of the Labour-affiliated Fabian Society said: “Hunt thinks he has set a trap for Labour by stealing tax rises Reeves has linked to spending plans. But Labour will easily find other ways to raise taxes on wealthy people who pay too little. Their policies can be funded without raising taxes on families feeling the squeeze.”

Labour backs fuel duty freeze despite Hunt’s claims

Hunt also froze the alcohol duty and fuel duty, and claimed Labour had opposed the fuel tax freeze previously.

“We haven’t,” a bemused Reeves could be seen saying on the shadow frontbench. Starmer made clear Labour supported the freeze and urged the Chancellor to “acknowledge” this.

Childcare pledge as Tories told to deliver on existing plans

Hunt said “those who can work should”, and said guarantee childcare providers funding for two years would help more parents work. Meanwhile child benefit eligibility will be widened to include more working households.

Starmer said Hunt must “come clean” on whether the Tories would deliver on their existing plans to reform childcare entitlement this April, calling it one of the Tories “wreckless” policies that “unravel at the first contact with unreality”.

The lesson is “those that broke our economy cannot be trusted to repair it”.

Energy firm tax extended – but rebelling minister shows Budget ‘falling apart’

The current windfall tax on oil and gas companies has been extended by another year. Scottish Conservatives’ leader  Douglas Ross urged Hunt to reconsider, and energy security and net zero minister Andrew Bowie called it “deeply disappointing”.

Shadow Scotland secretary Ian Murray posted on X: “A government minister railing against his governments budget. The ink isn’t even dry and it’s falling apart.”

Hunt demands more productive NHS – but Labour note he pledged a paperless NHS by 2018

Hunt said the UK needs a “more productive state, not a bigger state”, and would maintain planned public spending growth at 1% in real-terms – but also launch a public sector productivity plan, starting with the NHS. Starmer welcomed extra NHS funding, but pointed out ex-health minister Hunt previously had a goal to make the NHS paperless by 2018.

The Treasury in its next Spending Review will also “prioritise” proposals that deliver long-term savings equivalent to the investment required, according to Hunt.

Harrop said it was “right to invest in prevention and technology for our public services”.

More Hunt Budget measures – and what Labour said

Shadow Chancellor Rachel Reeves said: “Taxes are still rising, prices are still going up in the shops and mortgages are higher. Nothing Jeremy Hunt has said today changes that. It’s time for change.”

Hunt announced the household support fund will be extended for another six months, as well as  an increase to the repayment period for new loans offered to those claiming universal credit, and and abolition of the £90 cost of getting debt relief orders.

Business changes include extending a recovery loan scheme and the scope of full expensing, as well as raising the VAT registration threshold for firms. Hunt announced a regional “trailblazer” devolution deal in the North East and devolution plans in Surrey, as well as further regional investments in Cambridge and north Wales.

Hunt said the government would buy an Anglesey site where nuclear plans were shelved in 2019, with hopes of reviving them. Shadow Secretary of State for Wales said: “Without a timeline and process for new nuclear at the site, why would anyone trust this chaotic government to deliver anything?”

There will also be a sell-off of government NatWest stocks, a new British savings bond and a new “British ISA” for investments in UK stocks.

Hunt said the budget deficit would keep falling over the next five years to 1.2% in 2028-29, in a move likely to spark concerns of fresh austerity and accusations of “scorched earth” tactics for a Labour government.

Labour chair of the Local Government Association Shaun Davies said: “It is disappointing that the Government has not today announced measures to adequately fund the local services people rely on every day.”

Harrop said that “once the election is over there is no way that any government will stick to these spending plans. More money will be needed to stop cuts in vital services already on the brink and for national security, investment and our ageing population”.

Melanie Brusseler, senior researcher at the Common Wealth think thank, said: “Today’s Budget aims to constrain an expected Labour government in power: if Labour heeds these political constraints it will limits the possibilites of our energy future.”

Starmer meanwhile accused the government of “ducking” responsibility on issues like compensation for the Post Office or contaminated blood scandals, with the Office for Budget Responsibility confirming they are not currently factored into its forecasts.

Matt Wrack, general secretary of the Labour-affiliated Fire Brigades Union, said there was “nothing whatsoever” for public sector workers in the Budget, and accused Hunt of “showing two fingers” to the poorest families in a cost-of-living crisis.

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