Labour are accused of plotting secret council tax hike - as minister-in-waiting is caught saying he understands 'frustration' that rich people don't pay more

Labour were tonight accused of secretly plotting a raid on council tax after their Treasury deputy-in-waiting said he understands the 'frustration' of not making richer people pay more.

Darren Jones, in line to be number two at the Treasury under a Labour government, told a constituency meeting the current system was 'very out of date', blaming a 'capitalist democracy'.

As one of the 17 taxes Labour have been unable to rule out, shadow minsters have been repeatedly pushed on their plans to reevaluate council tax but have failed to say they would not raise the tax.

The party has only ruled out increases to income tax, national insurance and VAT - but has refused to explicitly rule out any others.

But Mr Jones, currently shadow chief secretary to the Treasury, said that Labour would not be elected if they suggested a revaluation of the charge, a leaked recording of the meeting reveals.

Asked whether those in homes worth more than a million pounds should pay more, he told the meeting he 'gets the frustration'.

'Now you can say that the whole system is like c*** and needs to be changed,' he said, adding that he agreed the council tax system is 'very out of date'.

Mr Jones's comments - which were made at a meeting in his Bristol constituency in May - were jumped on by the Tories.

Tory Chief Secretary to the Treasury, Laura Trott, said: 'Labour have been caught saying the quiet part out loud. 

'Darren Jones admitted that talking about any of their secret taxes on the family home before the election would cost them votes.

'The real risk of a Labour supermajority cannot be clearer. A vote for anyone other than the Conservatives will deliver a Labour Government, intent on taxing your home, your pension, your car - even your children's education.

'Do not give them a supermajority to lock in higher taxes for a generation.'

In the recording, Mr Jones was asked why Labour would not pledge to raise council tax on properties worth more than £1million.

He replied: 'Let me be frank with you about council tax, right. Any party has ever suggested revaluing council tax has never been elected. They just haven't.'

When the questioner pointed out that Labour could do it because they are leading in polls, Mr Jones said: 'They won't if they start telling everyone they have to pay more council tax.'

When the man persisted, saying that only those with houses worth more than £1million will pay more, Mr Jones says: 'There'll be people in this village that will pay a lot more council tax than they currently do, many of them older people.

'So the fact is again, I get the frustration but you live in a capitalist democracy. 

'So that requires people to vote for you to have power to hold power in order to be able to do things within a framework people are willing to work within.

'Now you can say that the whole system is like c*** and needs to be changed....'

Told the question was not about that, but instead arguing that increasing council tax for those 'who can definitely afford it' would mean the money could be given to working class people, Mr Jones replied: 'And I agree with you that council tax system is very out of date.'

Shadow chancellor Rachel Reeves's advisor Neil Amin Smith has previously said 'it is likely to be better to revalue and reform council tax at a national level'.

He also claimed this reform was 'overdue'.

Mr Jones has previously been recorded saying that Labour is considering an inheritance tax raid to 'redistribute' wealth if it gets into power.

He also suggested higher death duties would be used to tackle 'inter-generational inequality'.

Pat McFadden, Labour's national campaign coordinator, failed to rule out such a move yesterday.

He told Good Morning Britain: 'From that moment we've said that nothing in our manifesto requires us to raise any taxes beyond the very specific things that we've set out in the manifesto, and that remains the position on this as with anything else.'

Ms Reeves's tax tzar Sir Edward Troup, a former Tory Treasury special adviser, also raised the prospect that Labour could target inheritance tax.

He told LBC that 'inheritance tax will have to be on the agenda, but it will be unpopular' because Labour would have to raise money somehow.

To do this, he said they would have to look at the smaller taxes, adding: 'And inheritance tax is not a tiny tax. You know, it's a reasonable size tax.

'And so inheritance tax will have to be on the agenda, but it will be unpopular.'

Ms Reeves herself said in 2018: 'We need a radical overhaul of the tax system because our current system of wealth taxation isn't working.'

It came as a leading City forecaster warned that Ms Reeves would launch a £15bn tax raid on pensions, capital gains and inheritance if Labour wins a supermajority.

Analysts at the investment bank Citi said that she could launch a stealth raid on workers' pay packets.

Benjamin Nabarro, its chief UK economist, said Labour would 'ultimately tax and spend more than the current baseline', the Telegraph reported.

Bim Afolami, the economic secretary to the Treasury, said: 'Labour are plotting a hidden tax raid that is not in their manifesto and if they are given a super-majority on Thursday they will be free to impose it.'

A Labour spokesperson said: 'If the best the Tories can offer on the day of the election is a recording of Darren Jones explaining why Labour has no plans to raise council tax, then it shows the utterly desperate state they are in.

'Any other interpretation of his words is entirely false, scaremongering nonsense.'