The Tories moved to twist the knife on Keir Starmer over tax today as Jeremy Hunt demanded Labour rules out new taxes on property.
The Chancellor has unveiled a new ‘Family Home Tax Guarantee’ that stamp duty and capital gains will not be raised in the next five years, and council tax bands will not be revalued or added.
The intervention is designed to keep the focus on tax, as Labour desperately tries to fend off Conservative claims it would mount a £2,000 raid on families.
A rattled-looking Sir Keir branded Rishi Sunak a ‘liar’ last night after brutal clashes in the first TV election debate.
The PM made the allegation 12 times during the hour-long programme – with the Labour leader seen as having failed to deny it strongly enough.
Mr Hunt warned that Sir Keir Starmer and Rachel Reeves could follow Labour’s lead in Wales and embark on a controversial shake-up of council tax which critics warn could hike bills for many.
He argued that Labour was considering further tax raids on people’s homes – and pledged the Tories would not follow suit.
Under the new ‘guarantee’ the Conservatives will commit to not re-evaluating council tax bands, as Labour is doing in Wales.
The number of bands would remain the same under a Rishi Sunak government and council tax discounts would not be cut, the party said.
Stamp duty rates would also be frozen and the tax relief that protects homes from capital gains tax would be maintained, the Tories pledged.
Mr Hunt said only the Tories would ‘protect your family home to give you peace of mind with our guarantee that there will be no rises in such taxes for the whole of the next Parliament’.
Labour did not match the pledge, instead insisting: ‘We will not be raising taxes on working people.’
Shadow defence secretary John Healey said in interviews this morning that the Tories were ‘desperate’.
‘It is indeed a sad place when we will not be raising taxes on working people and we’ve got a prime minister, the deeper into the election he gets, the more desperate he gets,’ he told Times Radio.
‘He’s lying to (the British people) again on waiting lists, NHS waiting lists.
‘They’ve gone up, not down since he promised to bring them down. On small boats, the numbers are at record levels this year. They haven’t gone down.
‘And on taxes, the Tories have set the highest rate of tax and burden of tax for 70 years.
‘And so we want to reassure people. we’re not going to be raising taxes on working people.
‘We’re not going to raise national insurance. We’re not going to raise VAT. We’re not going to raise income tax.
‘And when people see our manifesto, they will see our plans are fully costed and we’ve spelled out how we will pay for them.’
It comes after it was revealed that Labour’s shadow chancellor Rachel Reeves has previously advocated for council tax re-evaluation.
In 2018, she suggested the system should be ‘overhauled and replaced’ with ‘a property tax, levied on property owners’.
She said council tax was ‘at the very least long overdue a re-evaluation and revision of existing bands – a power which could be devolved to local government to match local needs’.
The Tories said this would amount to a ‘family home tax’, which would hammer 26 million homes with higher bills.
The Labour-run Welsh government has also been considering a major shake-up in council tax. It is thinking of placing properties into bands based on up-to-date values and updating band thresholds.
It is also looking at reducing the tax rates applied to low-value properties and increasing them on high-value properties, though the shake-up has been postponed until 2028.
In a consultation document published last year, it said a ‘more progressive system would shift the current pattern of payment away from those with the least and require those with the most to make a greater contribution’.
It added: ‘There are many ways in which we can make the system fairer without making it more progressive, but a more progressive system would have a greater impact in addressing the inequalities in property wealth.’
Council tax bands in Wales are based on property values in 2003, while in England they are based on values in April 1991.
Since then, property values have changed significantly, and economists, including the Institute for Fiscal Studies, have said the banding in England is highly regressive.
But it is politically difficult to change council tax bands in England, as many voters in London and the south east would likely end up with higher bills.