Labour’s Ashworth declines to rule out capital gains or corporation tax hikes

A Labour frontbencher has refused to rule out raising capital gains tax or corporation tax if Sir Keir Starmer’s party wins the election.

Jonathan Ashworth stressed that there would be no increase in income tax, national insurance or VAT under Labour, insisting: “Nothing in our plans requires additional tax to be raised.”

But he declined to directly answer a question on whether rates of capital gains tax – paid on profits from selling an asset – would go up.

Instead, Mr Ashworth told a central London press conference attacking Tory manifesto costings on Monday: “Under a Labour government, there will be no increase in income tax, no increase in national insurance, no increase in VAT.

“Nothing in our plans requires additional tax to be raised.”

He similarly evaded a question about whether that means a Labour government would have to borrow more to pay for its plans.

“We will always put sound public finances first,” Mr Ashworth said.

“Every single commitment that we put forward in our manifesto will be fully funded and fully costed, and you’ll know where every penny piece of the investment is coming from.”

He pointed to Labour’s plans to close the tax loophole left by the Government’s changes to non-dom tax status and impose VAT on private school fees.

Party leader Sir Keir last week ruled out raising corporation tax, but it was absent from Mr Ashworth’s list of tax hikes he ruled out.

He insisted the “days of austerity are not returning with a Labour government” and that “we are never going to play fast and loose with the public finances”.

Ahead of the Tory manifesto launch on Tuesday, Mr Ashworth said: “Tomorrow, you will see a document littered with unfunded commitment after unfunded commitment – a desperate wish list, the most expensive panic attack in history from a weak, desperate Prime Minister who in the chaotic scattergun of announcements which he has made in his campaign to date has not even bothered to try to make his sums add up.”

Both Labour and the Conservatives have been criticised by Paul Johnson, director of the independent Institute for Fiscal Studies, for their unwillingness to consider tax increases to raise the money they need.

The think tank has repeatedly called for both main parties to “level” with the public about trade-offs between taxation, spending and borrowing, arguing that current plans will see real-terms spending cuts for some departments unless more money is found through higher taxes or borrowing.

Earlier on Monday, Sir Keir said growth was the answer.

He said: “I ran a public service, I care about public services. We are not going back to austerity, but we will pull the lever called ‘growth’.”

Mr Ashworth also insisted that “we’ve got a big plan to grow the economy” after 14 years of “anaemic” growth under the Conservatives.

And he denied Labour’s entire approach to the public finances was based on gambling on the proceeds of growth, telling the PA news agency: “If you get somebody into a good, well-paid job, and you get them off a waiting list … when you give our children the best start in life because they’ve got good-quality teachers in their schools, and you’re dealing with any mental health problems that our teenagers face, that’s not gambling.

“That’s a transformation of this country.”