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1 year ago
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Rachel Reeves today swiped that Jeremy Hunt was making Britons pay for the costs of Tory failure with higher taxes - prompting a furious retort from the Chancellor.
The Labour shadow chancellor, responding to Mr Hunt's Autumn Statement, said taxes would be higher at the next general election than they were at the last one.
She claimed Chancellor's latest financial package had 'lifted the lid on 13 years of economic failure' under Conservative rule.
Mr Hunt used his Autumn Statement to cut National Insurance by 2p, which is set to benefit around 30 million people.
But Ms Reeves lashed out at the Chancellor's failure to unfreeze thresholds for income tax or National Insurance, which - she said - meant working people are 'still worse off'.
Responding to Mr Hunt's Autumn Statement in the House of Commons, she told MPs the Tories had 'pushed the costs of their failure onto others'.
The Chancellor hit back as he suggested Labour are still a party of high spending and high tax, while he also claimed the Opposition 'dream' of bringing back EU free movement rules on immigration.
Mr Hunt also took aim at Ms Reeves as a 'copy and paste shadow chancellor', as he noted how she was caught up in a plagiarism row over her new book.
Rachel Reeves swiped that Jeremy Hunt was making Britons pay for the costs of Tory failure with higher taxes - prompting a furious retort from the Chancellor
Mr Hunt hit back as he suggested Labour are still a party of high spending and high tax, while he also claimed they 'dream' of bringing back EU free movement rules on immigration
What is in Jeremy Hunt's Autumn Statement?
National insurance cut: £5bn a year
The headline rate for employees is being reduced from 12% to 10%, putting more hundreds of pounds in the pockets of 27million Brits.
For the self-employed, Class 2 contributions are being abolished and Class 4 contributions reduced from 9 per cent to 8 per cent.
Making 'full expensing' permanent: £10bn a year
Businesses have been benefiting from rules that mean they can claim back tax on investment in plant and machinery.
That is due to end in 2026, but Jeremy Hunt is set to make it permanent.
State pension to rise 8.5%: £2bn
The Chancellor is sticking to the triple lock that ensures pensions rise by the highest out of inflation, average earnings or 2.5%.
There had been speculation a lower level could be used due to NHS pay deals warping the numbers.
Benefits to rise 6.7%: £3bn
Mr Hunt had considered increasing benefits by the lower October inflation figure of 4.6 per cent, rather than the September number usually used.
However, he has opted to stick with convention and push for more people to re-enter the workplace.
Living wage to rise to £11.44: n/a
The national living wage will rise by 9.8% to £11.44 in April.
The rate is currently £10.42 for workers aged over 23, but the new figure will apply to 21 and 22-year-olds for the first time.
Mr Hunt used his Autumn Statement to draw battle lines for a long general election struggle by starting to reduce the tax burden on businesses and families.
He insisted ministers had chosen to 'reject big government, high spending and high tax' and handed a tax cut to 27 million working people by slashing the main National Insurance rate from 12 per cent to 10 per cent.
National Insurance is also being slashed for the self-employed with Class 2 contributions abolished and Class 4 reduced.
But the Chancellor's claim to be lowering the tax burden was thrown into doubt by the Treasury watchdog, which pointed out his 'stealth' raid from freezing income tax and National Insurance thresholds will dwarf the cuts.
Ms Reeves seized on this point in her reply to Mr Hunt in the Commons.
She told MPs: 'From their failure to uprate income tax or National Insurance bands, to forcing councils to raise council tax, the Conservatives have pushed the costs of their failure onto others.
'But the British people won't be taken for fools. They know that what has been announced today owes more to the cynicism of a party desperate to cling on to power than the real priorities of this high-tax, low-growth Conservative Government.
'So I think we can forgive taxpayers for not celebrating when they see the truth behind today's announcements.
'Going into this statement the Government had already put in place tax increases worth the equivalent of a 10p increase in national insurance.
'So today's 2p cut will not remotely compensate for the tax (increases) already put in place by this Conservative Government.
'The fact is that taxes will be higher at the next election than they were at the last.'
As he responded to Ms Reeves, the Chancellor took aim at the plagiarism row over her new book, titled 'The Women Who Made Modern Economics'.
'I'm afraid the shadow chancellor has shown once again that Labour has nothing credible to say on the economy,' Mr Hunt told MPs.
'She tells the papers this morning that she will accept these measures - as you would expect from a copy and paste shadow chancellor.'
The Chancellor had also used his Autumn Statement to announce further efforts to get the long-term unemployed back into work.
He hailed how the Office for Budget Responsibility had estimated his measures would 'increase the number of people in work by around 200,000... permanently increasing the size of the economy'.
And, in a swipe at Labour, he added: 'I know some on the benches opposite would prefer to fill those vacancies in a different way. They hanker after a more liberal immigration regime or even dream of bringing back free movement.
'But Conservatives say we should unlock the potential we have right here at home, which we do with the biggest set of welfare reforms in a decade in today's Autumn Statement for growth.'
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