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Labour says it is ‘not calling for tax rises’ to pay for coronavirus recovery spending after hint at wealth levy

Anneliese Dodds (left) will challenge the Chancellor at his mini-budget on Wednesday not to raise taxes (PA)

3 min read

Labour has said it does not want the Government to raise taxes to pay for the ballooning costs of fighting the coronavirus pandemic.

Shadow Chancellor Anneliese Dodds urged her opposite number Rishi Sunak to scrap his “one-size-fits-all” withdrawal of the job retention scheme and other measures to prevent mass unemployment. 

But she made clear that Labour backed measures to boost "growth" rather than tax hikes after hinting at the party's support for a wealth tax to help foot the bill.

Her intervention comes ahead of the Chancellor’s summer economic update on Wednesday, in which he is set to unveil a three-point “Plan for Jobs” to aid economic recovery. 

Ms Dodds said: “I say to the Government, if it does increase taxes during the recovery, and cuts back on the public services we all rely on, this will damage demand and inhibit our recovery.

“Labour is not calling for tax rises - we are calling for growth. 

“The Tory manifesto committed to no rises in income tax, National Insurance or VAT and therefore it is for them to set out how any additional spending will be paid for. 

“It’s the Chancellor’s job to make sure the economy bounces back from this crisis so there is money in the coffers to protect the public finances.”                               

Her latest comments comments come after Ms Dodds suggested a wealth tax could be used to balance the books.

She told the BBC's Andrew Marr Show: "My view is if we do need to see an increased tax take, we shouldn't see it coming from those low and middle-income people, instead we should have a focus on the very best-off people.

"We have seen a rise in income and wealth inequality in recent years and I think that those with the broadest shoulders should be bearing more of a contribution if that contribution is needed.

"But we've got to be clear, that would only be needed if we are not growing our way out of this crisis."

Ms Dodds is also expected to use her response on Wednesday to urge Rishi Sunak to ensure the furlough scheme doesn’t merely “postpone unemployment”.

She will add: “The money sunk into the Job Retention Scheme must not have merely served to postpone unemployment.

“The scheme must now live up to its name - supporting employment in industries which are viable in the long term.

“And we need a strategy for the scheme to become more flexible, so it can support those businesses forced to close again because of additional localised lockdowns.

“There is still time to avoid additional floods of redundancy notices”.

The Conservatives hit back at Labour, accusing the party of failing to be “honest” on their economic plans.

Party co-chair Amanda Milling said: “On Monday, Sir Keir Starmer said a tax raid on homes and pensions has ‘got to be’ something ‘we look at.’

“Sir Keir Starmer and Labour need to come clean on a tax raid on homes, pensions and savings which would hammer hardworking families and undermine Britain’s economic recovery.”

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