Keir Starmer banks on economic growth to ‘rebuild Britain’

The party says it will pay for its policies through £8.5bn in annual tax rises, and £1.5bn in savings from cutting government “waste and other efficiencies”.

Its proposed tax rises include introducing VAT on private school fees, a 1% stamp duty surcharge on foreigners buying property, and hiking taxes on bonuses for managers at hedge funds and private equity firms.

It says extra government borrowing would be limited to £3.5bn a year to fund its plan to invest in green energy projects.

And in a bid to defuse Tory attacks, it has ruled out raising rates of income tax, National Insurance, or VAT, presented as a “tax lock” to voters.

It has also ruled out increasing the main rate of corporation tax, which companies pay on their profits, in an attempt to burnish its pro-business credentials.

It has not made the same commitment for capital gains tax, charged on profits from selling assets, saying instead its manifesto plans do not “require” a hike.

Paul Johnson, the director of the Institute for Fiscal Studies think tank, said it was “not a manifesto for those looking for big numbers”.

“The public service spending increases promised in the ‘costings’ table are tiny, going on trivial,” he said.

He added that Labour’s decision to sign up to fiscal rules limiting debt as a share of national income, and its scheduled borrowing for green projects, would leave “no room” for more spending than planned by the government currently.

But it did not contain new details of its plans to overhaul the planning regime, which it has put front-and-centre of its plans to boost the economy, as well as a target to build 1.5m new homes in England over five years.

Already-announced plans in this area include streamlined rules for approving laboratories and digital infrastructure, and restoring housing need targets for councils scrapped by the government in late 2022.

Labour’s manifesto was signed off at a party meeting last week but has failed to win the support of Unite, its biggest trade union backer, which argues the party’s scaled-back plans to improve workers’ rights do not go far enough.

The package, first unveiled in 2021, would scrap qualifying times for parental leave and sick pay rights when employees start a new job, and boost flexible working rights where “reasonably feasible”.

But notably, a pledge to introduce collective wage bargaining “across the economy” has been replaced with a plan to “start by” introducing a fair pay agreement in the adult social care sector, before a potential roll-out in other areas.

The party has long argued that growth is the only responsible way to generate extra funding for public services and says it wants to make the UK the fastest growing economy in the G7 group of rich nations if it wins power.

Arguing that it will inherit a difficult financial position if it enters office, it has made only a handful of additional spending commitments since the election was called three weeks ago.

These include £140m to convert 3,300 classrooms into nurseries, paid for by introducing VAT on private school fees, and £320m for repairing potholes, financed by deferring a new bypass from the A27 in Sussex.

Asked after the launch to name a policy not in the manifesto he would ideally have liked to include, Sir Keir named removing the current two-child limit on claiming some benefits.

He told the BBC’s Chris Mason he knew “many people” were keen to see the reversal, but “we’re not able to afford it”.