Labour accused of another big tax flip-flop over Capital Gains

Shadow Chancellor Rachel Reeves speaking on Radio 4 Today

The Labour Party has been accused of another major flip-flop on tax policy, after Shadow Chancellor Rachel Reeves this morning said the party has “no plans”. However just last week the party criticised the Prime Minister after his tax returns showed he paid less tax because he draws significant income from his private wealth.

Responding to the Prime Minister’s tax returns, published last Wednesday, deputy leader Angela Rayner said it revealed a “Tory tax system where the PM pays a far lower rate than working people – who face the highest tax burden in 70 years”.

She said: “His latest handout to the richest one per cent shows you exactly who he puts first.”

A Labour Party spokesman told the Telegraph last week that the party had no current plans to raise capital gains tax, “but that it could not rule out a change in future”.

This morning, however, Shadow Chancellor Rachel Reeves launched an impassioned defence of low taxes on capital gains, suggesting they helped make Britain competitive for people wanting to start and sell businesses.

She said: “I don’t have any plans to increase Capital Gains Tax.

“Well look there are people who have built up their businesses, who may be at retirement and want to sell that business, they may not have had huge income through their life, they’ve reinvested in their business and this is their retirement pot of money.

“And we’ve also said we want Britain to be the best place to start and grow a business. The biggest challenge we have in Britain today, Nick, is we have such low growth.

“I don’t have plans and I haven’t set out any plans to increase Capital Gains.”

Responding to Ms Reeves’s words, a Tory Party source told the Daily Express: “Labour has more flip flops than Scarborough beach.”

“You can’t believe a word they say. Be in no doubt, Sir Keir will tax doctors into early retirement and come after your savings.”

The latest perceived flip flop comes after the Labour Party was accused of a U-turn and hypocrisy over their objections to the abolition of a lifetime pensions savings allowance in Jeremy Hunt’s budget.

Despite objecting to the policy as a “tax cut for the richest one percent”, Shadow Health Secretary Wes Streeting called for the policy last September, as a way to encourage doctors to continue working until later in their careers.

He said: “I’m not pretending that doing away with the cap is a particularly progressive move. But it is one that sees patients seen faster, and will inevitably save lives. I’m just being hard headed and pragmatic about this.”

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It then further emerged that Sir Keir has a unique pension deal from his time as Director of Public Prosecutions, which allows him to avoid tax on his savings.

The bespoke tax arrangement means Mr Starmer benefits from a “tax-unregistered” pensions scheme, dis-applying the lifetime allowance on contributions from his time as DPP from 2008 to 2013.

Sir Keir had a salary of £200,000 a year while serving as DPP.

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