Labour's Mixed Messages On Tax Leave Voters Dazed And Confused

Britain's Prime Minister Keir Starmer and Chancellor of the Exchequer Rachel Reeves attend a concert to mark the 80th Anniversary of V-E Day at Horse Guards Parade, London, Thursday May 8, 2025. (Justin Tallis/Pool via AP)Buckle up everyone, the next few months are going to be a little bumpy.Rachel Reeves hasn’t even named the date yet for her autumn Budget – it will either be in October or November – but already it is dominating the political agenda.The good news for the government is that gives them plenty of time to come up with a consistent message on tax, because right now they are all over the shop.The consensus at Westminster is that taxes will have to go up to fill the black hole caused by the government’s U-turns on winter fuel payments and welfare cuts. The only questions that remain are which ones and by how much.Left-wing Labour MPs have been loudly stating their support for a wealth tax on the assets of the super-rich. Initially, the chancellor’s opposition to such a levy appeared iron-clad.But more recently, neither she nor anyone else in the cabinet has been willing to completely rule one out.The government’s confused position was not helped on Sunday when transport secretary Heidi Alexander said the possibility of a wealth tax was not “directly” discussed at a cabinet away day last week.Alexander then compounded the issue by insisting taxes would not go up for people on “modest incomes”, further fuelling speculation that the better off are going to get whacked.Darren Jones, the chief secretary to the Treasury, was sent out this morning to tell the country what Alexander had meant, and was not wholly successful.He set even more hares running by insisting the government would stick to Labour’s manifesto pledge not to increase “the headline rate of income tax or employee National Insurance and not to increase the headline rate of VAT”.Except Labour’s manifesto made no reference at all to “headline” tax rates, leading to speculation that the government was looking for a clever way of putting them up while claiming not to brake their pre-election promises.The PM’s official spokesman then had to tell journalists later that ministers were not moving the goalposts.“No, I mean referring obviously to the manifesto commitment which we’ve repeatedly restated,” he said. “Beyond that, it will be up to the chancellor to set out policy at fiscal events in the usual way.”Reeves herself popped up this morning, and again refused to rule out a wealth tax.She said: “We haven’t even set the date for the Budget yet, so please forgive me if I’m not going to speculate about what might happen at an event that we haven’t even decided a date on yet.“But we’ve been really clear in our manifesto about the taxes that we won’t increase, and we’re not going to increase the taxes that working people pay, their income tax, their national insurance and their VAT, because I do recognise the struggle that ordinary working people have faced these last few years with the cost of living.”That brought the number of different government positions on tax to three in a little over 24 hours.Ministers need to quickly get their stories straight, before voters’ mood shifts from confusion to outright anger.Related...Rachel Reeves Has Been Given More Bad Economic News. Is The UK Heading For Recession?Keir Starmer And Rachel Reeves Could Be Preparing For Their Biggest U-Turn Yet. Here's WhyRachel Reeves Says She Is 'Cracking On With The Job' A Day After Crying In Commons

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