Conservatives challenge Labour to match new Family Business Tax Guarantee

Ahead of the launch of the Labour Party manifesto, the Conservatives are today (13 June) challenging Labour to rule out tax rises on enterprise and jobs, including Capital Gains Tax and Employer National Insurance.  

Chancellor Jeremy Hunt is launching a new Family Business Tax Guarantee, under which the Conservatives will, for the whole of the next parliament, pledge: 

• No increase in Employer National Insurance, the jobs tax 

• No increase in Capital Gains Tax 

• No increase in Corporation Tax rates 

• Retain key tax incentives that encourage small businesses to grow, including the Enterprise Investment Scheme, Seed Enterprise Investment Scheme, Venture Capital Trusts, Business Asset Disposal Relief, Agricultural Property Relief and Business Relief. 

The Chancellor is challenging Labour to match this guarantee, or otherwise come clean on which taxes they plan to raise if they win power. 

Since Thursday last week, Keir Starmer and his shadow ministers have failed to rule out raising Capital Gains Tax 39 times.  

By contrast, Rachel Reeves issued a statement ruling out raising VAT within one hour of receiving a Conservative press release pledging the same.  

Labour have refused to match our Triple Lock Plus, meaning pensioners would pay tax on their State Pension for the first time ever under Labour's Retirement Tax. They have also refused to rule out raising taxes on family homes and pensions in response to previous Conservative tax guarantees. 

It has been widely reported that Labour is preparing ten to twelve tax rises should they win the election, tax rises that will not be featured in Labour's manifesto.  

If Labour fails to match the Conservatives' Family Business Tax Guarantee, they will cost working people by discouraging entrepreneurs from starting new companies and disincentivising businesses from investing in their facilities, staff, or equipment. That means lower wages, lower productivity, and ultimately lower growth. 

Jeremy Hunt, Chancellor of the Exchequer, said: 

“Ultimately it's not businesses that pay taxes, it's people. That's why we're guaranteeing not to raise taxes on businesses and jobs in the next parliament, and I'm challenging Labour to rule these tax hikes out too.  

“If they don't, this is just further proof that Labour is planning to fill the £38.5 billion black hole in their spending promises by hiking taxes by at least £2,094 for every working family. So if you think Labour will win, start saving.”

ENDS 

For further information, please contact the Press Office on 020 7984 8121 or email us at press@conservatives.com.  

Notes to Editors 

Labour's £2,094 tax raid for working people: 

·                  Analysis of Labour's spending plans show Labour have a blackhole of £38.5 billion – the equivalent of £2,094 in taxes on working families. Using both official HM Treasury Costings, HMG figures and Labour's own numbers, and a publicly quoted investment bank; analysis shows that Labour have a £38.5 billion blackhole over the next four years equivalent to £2,094 in extra taxes for working families (The Conservative Party, Labour's tax rises, 17 May 2024; HM Treasury, Opposition Costings, 17 May 2024, link). 

·                  On 6 June 2024, The Guardian revealed Labour are eyeing up 10 to 12 tax rises in the autumn. ‘One source said: “Rachel has between 10 and 12 measures she is looking at which she hasn't yet announced, all of which will raise small pots of money, with the ambition they should add up to something all together”' (The Guardian, 6 June 2024, link).  

·                  The Shadow Chancellor is being ‘lobbied heavily' to align income tax and capital gains tax. ‘The shadow chancellor is being lobbied heavily to increase CGT…Some in the shadow cabinet want the tax to be raised in line with income, which would mean a jump from a higher rate of 24 per cent to 40 per cent or even 45 per cent, raising an estimated £8 billion' (The Guardian, 6 June 2024, link). 

On top of Labour's £2,094 tax raid on working families, Labour are already committed to more tax rises: 

·                  Labour would impose a Family Homes Tax. Through the Family Home Guarantee, the Conservatives have committed to not increasing the number of council tax bands, to not undertaking a council tax revaluation, and not cutting council tax discounts. Labour refused match the commitment, in the strongest indication that your home is next in Labour's tax raid (The Daily Telegraph, 5 June 2024, link; The Independent, 6 June 2024, link). 

·                  Labour would impose the Retirement Tax, making the State Pension subject to income tax for the first time in history. Through the Triple Lock Plus, the Conservatives have committed to increasing the personal allowance for pensioners at the same rate as the state pension, the highest of either 2.5 per cent, CPI or average earnings. Labour have said they will not match the commitment, dragging the state pension into income tax for the first time in history (BBC News, 27 May 2024, link; LabourList, 28 May 2024, link). 

·                  Labour would impose a Pension Tax. Through the Pensions Tax Guarantee, the Conservatives have committed to retaining the ability to draw down 25 per cent of your pension as a tax free lump sum and have committed to no new taxes on pensions. Labour have said they will not match the commitment (The Daily Telegraph, 1 June 2024, link). 

·                  Labour would impose a Parent Tax. Through reforming the Child Benefit tax system, the Conservatives will cut taxes for 700,000 families by an average of £1,500. Labour have not yet said they would match the commitment meaning they would impose the Parent Tax on hardworking families (BBC News, 6 June 2024, link). 

Keir Starmer and Labour shadow ministers have failed to rule out 39 times that they are planning to increase capital gains tax if in power since Thursday last week: 

·        On 6 June 2024, Seema Malhotra refused twice to rule out raising capital gains: 

o        STUDIO: ‘Seema, will Labour rule out any increases to capital gains tax, stamp duty or council tax bands?' MALHOTRA: ‘Well Jo you won't be surprised that the answer is the same as before the election and everything we've said in the election – which is that our plans are fully costed, we don't see any reason to be raising other taxes and we have committed to not raising income tax, national insurance and VAT' (BBC 2 Politics Live, 6 June 2024, archived).  

o        STUDIO: ‘But can you categorically rule out increases in taxes, not on working households, which I think is the phraseology that Labour has used, but on broadly property taxes' MALHOTRA: ‘Well this is what Rachel and Keir have been saying, that we are not raising taxes. We haven't had any reason to' STUDIO: ‘Specifically capital gains tax, council tax bands and stamp duty' MALHOTRA: ‘The choices we're making as you know are to deal with the loopholes in the non dom…' (BBC 2 Politics Live, 6 June 2024, archived). 

·        On 7 June 2024, Matthew Pennycook refused three times to rule out increasing capital gains tax:  

o        STUDIO: ‘Can you tell us, will Labour – a Labour government increase capital gains tax?' PENNYCOOK: ‘We do not intend to levy any additional taxes' (Times Radio, 7 Jun 2024, archived). 

o        STUDIO: ‘Intends doesn't mean no does it?' PENNYCOOK: ‘No it was very clear' (Times Radio, 7 Jun 2024, archived). 

o        STUDIO: ‘I don't intend to get sushi on the way home but I might do' PENNYCOOK: ‘But we've got no intention to raise additional taxes…' (Times Radio, 7 Jun 2024, archived).  

·        On 9 June 2024, Emily Thornberry refused to rule out raising capital gains tax: 

o        STUDIO: ‘Given that you're so categorically ruling out increasing taxation in these areas can we deduce, therefore, that it is possible you may increase levies in other areas. So for example, inheritance tax, capital gains or the many others' THORNBERRY: ‘So the I mean obviously at each budget the Chancellor will need to if it is Rachel will need to make, decisions at that time… I'm not really in a position to (inaudible) now to tell you.' (LBC, 9 June 2024, archived).  

·        From 9 – 10 June 2024, Keir Starmer refused twice to rule out raising capital gains tax: 

o        CORRESPONDENT: ‘The Liberal Democrats today have said that they will increase capital gains tax and tax on big banks to try and fund some of their policies. Would you consider doing the same? And if not? Are you being honest with the public about how many cuts or potential tax rises might be needed to fund some of your pledges?' STARMER: ‘We're going to launch our manifesto later this week. There'll be no tax surprises in there. We're not going to increase tax on working people. And that means no increases in income tax in National Insurance and VAT and all of our plans. As I say, fully costed, fully funded. And they don't require tax rises over and above those that we've already set out. So, there won't be any surprises when the manifesto is unveiled on Thursday' (Sky News Pool Clip, 10 June 2024, archived). 

o        As was reported in an interview with Keir Starmer in The Guardian ‘Starmer declined to rule out a Labour government increasing CGT in future, amid speculation he could go some way towards equalising it with income tax…I'm not going to write five years' worth of budgets three and a half, four weeks before an election,” he said' (The Guardian, 9 June 2024, link).  

·        On 10 June 2024, Jonathan Ashworth refused four times to rule out increasing capital gains tax: 

o        Q: ‘Can I ask you, are you ruling out Labour that is, are you ruling out increases in capital gains tax?' ASHWORTH: ‘You'll have seen, tax plans that Rachel Reeves has set out with a triple lock announcement over the weekend. Under a Labour government, there'll 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…' (Press Conference Q&A, 10 June 2024, archived). 

o        Q: ‘Is that a yes or no sorry?' ASHWORTH: ‘I have explained. We have made our commitment clear on income tax, National Insurance and VAT. It will not increase. The Tories have lied about Labour's tax plans. And I'm being clear today. Nothing in our plans requires additional tax to be raised' (Press Conference Q&A, 10 June 2024, archived). 

o        Q: ‘So surely the only conclusion we can draw is that the other ones you've been repeatedly asked about like capital gains tax, inheritance tax, fuel duty is that you're you're thinking about raising and thinking about the circumstances in which you might need to do so because of this commitment to sound public finances. So what are the circumstances where you would need to raise them?... Because obviously, if there weren't any circumstances in which you'd raise them, you would just say you'd never raise them' ASHWORTH: ‘As you know, Chris, there's nothing in our plans that requires additional tax, to be raised. Our commitments on tax are crystal clear…' (Press Conference Q&A, 10 June 2024, archived). 

o        Q: ‘Jonathan, you keep referring to no increase in income tax, no increase in national insurance, no increase in VAT. A week ago, there were four taxes. The other one was corporation tax. How come that slips off the list?...' ASHWORTH: ‘Whoa… Jim, I've heard all kinds of Conservative spokespeople, tour studios telling us they're going to end so-called double taxation on work, which is which is their shorthand for the abolition of, national insurance… We have been clear and Rachel Reeves has been quite clear that we are not increase in income tax, National insurance and VAT. That is our triple lock. She was talking about it yesterday…' (Press Conference Q&A, 10 June 2024, archived).  

·        On 10 June 2024, Bridget Phillipson refused to categorically rule out an increase in capital gains tax: 

o        STUDIO: ‘Will the party increase fuel duty if you win the election?' PHILLIPSON: ‘We have no plans to increase taxes on working people…' STUDIO: ‘Stamp duty?' PHILLIPSON: ‘No plans on that either' STUDIO: ‘Council tax?' PHILLIPSON: ‘Same again' STUDIO: ‘Capital gains?' PHILLIPSON: ‘No I mean we can go through all of these… We've got no plans to increase taxes' (Sky News, 10 June 2024, archived).  

·        On 10 June 2024, Anneliese Dodds refused to rule out an increase in capital gains tax: 

o        STUDIO: ‘And to be crystal clear, you're not going to look again at raising capital gains tax for wealthier people, as the Liberal Democrats are suggesting and you're not going to look again at inheritance tax?' DODDS: ‘So, Andrew, all of the policies that we have set out that require additional spending have been accompanied by clarity about where taxation will change to pay for them. We don't have plans to make additional changes' (LBC Tonight with Andrew Marr, 10 June 2024, archived). 

·        On 11 June 2024, Shadow Health Secretary Wes Streeting refused seven times to say whether Labour would increase Capital Gains Tax: 

o        Wes Streeting said that ‘not a single policy' in the Labour Manifesto requires Labour to increase capital gains tax. STREETING: ‘I can certainly confirm our manifesto is out on Thursday. I can certainly confirm that not a single policy in that manifesto requires Labour to increase capital gains tax' (BBC Breakfast, 11 June 2024, archived).  

o        Wes Streeting said that there would be no increase to Capital Gains Tax. STUDIO: ‘might there be any changes to capital gains tax under Labour?' STREETING: ‘our manifesto is out on Thursday, but I can tell you that nothing in that manifesto requires an increase in capital gains tax' (BBC Radio 4 Today, 11 June 2024, archived).  

o        Wes Streeting said that ‘nothing in our manifesto' requires increases in capital gains tax. STREETING: ‘nothing in our manifesto requires increases in capital gains tax'  (BBC Radio 4 Today, 11 June 2024, archived). 

o        Wes Streeting said that there is nothing in ‘Labour's manifesto requires changes to capital gains tax…I think'. STREETING: ‘Nothing in Labour's manifesto requires changes to capital gains tax increases and capital gains tax. Nothing in Labour's manifesto I think' (Sky News, 11 June 2024, archived).  

o        Wes Streeting said there was ‘nothing in Labour's manifesto that requires us to put up capital gains tax'. STUDIO: ‘So are you going to put up capital gains tax' STREETING: ‘Well I can reassure people that nothing in Labour's manifesto requires us to put up capital gains tax' (Times Radio, 11 June 2024, archived).  

o        Wes Streeting refused to be explicit on capital gains tax. STUDIO: ‘But if you're the party of business, why wouldn't you be explicit on capital gains tax?' STREETING: ‘Or people will say on Thursday that we are being explicit about how we're raising money and where we're investing money, and that's really important…Rachel Reeves has also been clear that she thinks that we've got, the highest tax burden in 70 years and that it's important that we try and bring that tax burden down' (Times Radio, 11 June 2024, archived).  

o        Wes Streeting refused to say that there would not be changes made to capital gains tax. STUDIO: ‘It's a it's a tax it's very different to income tax. It's overall levied at a much lower rate, 10 to 28% rather than income tax at 20 to 45% it might be on a sale of a business, a second home or shares. So might you make any changes to it in government?' STREETING: ‘. I'll have to be a bit careful about not pre-empting that, but I don't think any of those things you just mentioned are in Labour's manifesto on Thursday' (BBC Radio 4 Today, 11 June 2024, archived). 

·        On 11 June 2024, Jonathan Ashworth refused nine times to rule out an increase in capital gains tax under Labour: 

o        STUDIO: ‘Right, Can you rule out categorically, Jonathan, that you will not increase on capital gains tax in the next Parliament, if you win, the election?' ASHWORTH: ‘Let me be absolutely clear again, we will not increase national insurance, income tax or VAT' (Politics Live, 11 June 2024, archived). 

o        STUDIO: ‘That's not my but that's not the answer to my question' ASHWORTH: ‘here is nothing in our plans that require additional tax increases. Every policy we put forward will be fully funded and fully costed. Contrast Rishi Sunak is making billions of pounds worth of commitments he cannot fund from savings he cannot find because the money is not there. It will mean five more years of chaos' (Politics Live, 11 June 2024, archived). 

o        STUDIO: ‘Hang on Jonathan. I'll come on to Steve, I'm afraid. Can you answer the question directly? And it doesn't matter if you can't rule it out, but are you ruling out increasing capital gains tax in the next parliament' ASHWORTH: ‘I am… There's a thousand different tax reliefs in the way these things...' (Politics Live, 11 June 2024, archived). 

o        STUDIO: ‘And capital gains tax?' ASHWORTH: ‘We have been very clear on income tax, VAT and national insurance we are...' (Politics Live, 11 June 2024, archived). 

o        STUDIO: ‘I know you pledged that, but you're not going to...'  ASHWORTH: ‘It is important that your viewers know we have a triple lock commitment on taxation' (Politics Live, 11 June 2024, archived). 

o        STUDIO: ‘But not on capital gains tax' ASHWORTH: ‘We want to see the tax burden come down for working people, because it's the highest tax burden for 70 years under the Tories. People are paying more in tax under the Tories. But we also know the Tories have completely wrecked the public finances because of what Liz Truss and the Conservative Party did to the public finances'  (Politics Live, 11 June 2024, archived). 

o        STUDIO: ‘Capital gains and inheritance tax…can you commit to not raising those two taxes' ASHWORTH ‘Rishi Sunak's problem is that the money is not there' (BBC News, 11 June 2024, archived). 

o        STUDIO: ‘I'm asking you about Labour…capital gains tax and inheritance tax' ASHWORTH: ‘I'm answering about Labour, because we know the wreckage of the public finances, but there is nothing in our programme that requires additional taxation, we've made a clear commitment on corporation tax, on VAT and national insurance and income tax, we will not raise them' (BBC News, 11 June 2024, archived). 

o        STUDIO: ‘In that list, did you say capital gains tax?' ASHWORTH: ‘corporation tax, national insurance, vat and income tax, but there is nothing in our plan that requires additional taxation' (BBC News, 11 June 2024, archived). 

·        On 11 June 2024, Rachel Reeves refused four times to rule out an increase in capital gains tax under Labour: 

o   STUDIO: ‘But twice this week, Sir Keir Starmer has refused to rule out an increase to capital gains tax. This morning he wouldn't comment on further sugar and salt taxes. Why are you being clear about certain taxes but not about others?' REEVES: ‘Well, all of our plans are fully costed and fully funded… there is nothing in our plans that require any additional increases in taxes' (Labour Press Conference, 11 June 2024, archived). 

o   STUDIO: ‘And can you specifically say what you're going to do about capital gains tax?' REEVES: ‘so the conservatives have increased taxes to the highest level in 70 years. They've increased taxes 26 times during the course of this parliament….There is absolutely nothing in our manifesto, absolutely nothing in our plan that requires any increases in taxes' (Labour Press Conference, 11 June 2024, archived). 

o   STUDIO: ‘will you roll out an increase in capital gains tax?' REEVES: ‘…everything in our manifesto and everything in my plans is fully costed and fully funded and does not require any additional increases in taxation' (Labour Press Conference, 11 June 2024, archived). 

o   STUDIO: ‘But you use this language of having no plans when asked about capital gains tax, wealth taxes, other property taxes, inheritance tax. Do you use the words no plans because it gives you the space in government to then say, well, we didn't have plans then, but we do have plans now' REEVES: ‘No, I'm under no illusions about the scale of the challenge that I will face. I don't need to become chancellor to know what a mess the government have made of the public finances, of public services. And the fact that the tax burden is at its highest level in 70 years. We don't need high taxes. What we need is growth. And, I don't want to, and I, I have no plans to increase any taxes beyond those which we have already set out' (Labour Press Conference, 11 June 2024, archived). 

·        On 11 June 2024, Darren Jones refused five times to rule out an increase in capital gains tax under Labour: 

o   STUDIO: ‘Echoed all across the the Financial Times, the sentiment in the city, which tells me that in business they're they're quite worried about the idea of a new Labour government, if there is a new Labour government, putting up capital gains tax. Are you going to give them any kind of relief? Are you going to give them any kind of reassurance when your manifesto is published?' JONES: ‘They don't need to be worried because all of our policies are fully funded and fully costed without changes to, to taxes beyond the loopholes' (Times Radio, 11 June 2024, archived). 

o   STUDIO: ‘But you haven't ruled it out, Darren' JONES: ‘But there's nothing in our manifesto that will require us to increase capital gains tax, nor any other major taxes, which is why we've said we are making that triple lock promise on income tax, National Insurance and VAT that will not be increased over the course of the Parliament under a Labour government' (Times Radio, 11 June 2024, archived). 

o   STUDIO: ‘You made no such promise when it comes to capital gains tax. Have you said you've got no plans to do it?' JONES: ‘the manifesto is fully funded and fully costed. There is nothing in it. And again, you'll see all of this detail and all of the financial information that underpins it on Thursday when we publish the documents. Nothing in our manifesto requires us to raise taxes' (Times Radio, 11 June 2024, archived). 

o   STUDIO: ‘What's the argument against increasing capital gains tax in your view?' JONES: ‘We don't need to increase headline rates of tax to fund our commitments. They're all funded by loophole closures' (LBC, 11 June 2024, archived). 

o   STUDIO: ‘is there a good argument to rule out an increase in capital gains tax now?' JONES: ‘We've been very clear that the tax burden is too high in this country and we want it to come down. And that's why our focus for the medium term is about getting growth back into the economy, because that's the only way in which you can get the public finances back on a sustainable footing for the long term, alongside modernising and reforming our public services. So we're spending taxpayers money as effectively as possible. That's our priority' (LBC, 11 June 2024, archived).