If you think Labour will win the election, start saving

I have an important public service announcement for the British people. If you think Labour will win the election, start saving.

We’re just over a week into the election campaign, and the choice the country is facing is already clear – a plan that takes bold action to cut taxes for pensioners and working people with the Conservatives, or tax rises under Labour.

By opposing our plan to cut taxes for pensioners with our new “Triple Lock Plus”, Labour’s retirement tax will mean higher taxes for millions of pensioners.

Not only that, it will also drag someone whose only income is the state pension into paying income tax for the first time in history, which means pensioners face the administrative burden of going through a tax assessment.

This is just the latest example of the tax increases Labour have been open about. But they still have a gaping black hole in their promises.

A couple of weeks ago, I published analysis from the Treasury and independent sources showing that they would have to increase taxes on working families by £2,094 over the next Parliament to pay for this £38.5 billion a year black hole – or £9 billion a year – in their commitments.

This hole exists even taking into account their class-based attacks on private schools and wealth creation in the City of London that won’t actually raise much revenue.

The first week of the campaign has shown how they want to plug that gap. Keir Starmer and Rachel Reeves have been explicit that they are promising not to raise income tax or national insurance in the next Parliament, but they have repeatedly refused to give the same guarantee about VAT.

Asked four times to rule out a rise in the main rate of VAT earlier this week, the shadow chancellor refused to do so. Keir Starmer was asked the same question twice and also refused to do so.

Increasing VAT to 21 per cent would raise about £9 billion a year – almost exactly the amount the analysis I published said was needed to plug their black hole. Coincidence? I hardly think so. It’s clear Keir Starmer and Rachel Reeves have a plan to increase VAT, and they don’t want you to know about it until after polling day.

A VAT increase will hammer families’ finances and push inflation back up, just when we have got it down to normal. That’s why I can commit today that not only will a future Conservative government not increase any rate of income tax or national insurance, but we also won’t increase the main rate of VAT for the duration of the next Parliament. Keir Starmer should make the same explicit commitment in front of a camera today.

There are big choices facing the country at this election, not least on the economy. After the turbulent years of Covid and the energy crisis caused by Putin, Conservatives have cut taxes by 0.6 per cent of GDP. We have cut national insurance for employees and the self-employed.

When it’s affordable, we will continue to cut this double tax on work until it’s gone – and we hope to make further progress in the next Parliament. And today we rule out increases in the rates of income tax and VAT.

If Labour don’t do the same, we will be a bit closer to knowing how they will raise £2,094 in taxes from you.