RACHEL Reeves has vowed to reinstate the top rate of income tax and use it to fund the NHS if Labour wins the next election – but there is still a huge hole in their spending plans.
In a keynote speech at the party’s annual conference in Liverpool today, the Shadow Chancellor blasted her Tory counterpart for promising “a tax cut for the wealthiest one percent”.
Last week in his mini budget bonanza, Kwasi Kwarteng revealed that basic income tax will be slashed by 1p next April, in a move that will save 31 million people £170 a year.
The Chancellor also confirmed that the 45 per cent top rate of tax will be scrapped at the same time.
The rate is paid by Brits who earn over £150,000 a year.
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The government argues that by slashing it, big businesses will be more likely to move their staff to Britain, in turn growing the economy and benefiting working people.
But Labour argues the tax scrap is a gift to the rich and won't have any benefit on low income households.
Ms Reeves pledged to reinstate the top rate if made Chancellor, and use the £2bn it raises to double the number of medical school places from 7,500 to 15,000.
The tax would also pay to double the number of qualifying nurses every year, train 5,000 more health visitors and create 10,000 extra nursing and midwifery placements.
The Shadow Chancellor said: “We need strong, sustainable public finances alongside strong, sustainable public services.
“So, our priority is not tax cuts for the wealthiest few.
“It is securing our public finances and investing in our public services.
“I can tell you: with a Labour government, those at the top will pay their fair share.”
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Ms Reeves also pledged that Labour would completely scrap business rates and replace it with "a new system of business taxation fit for the 21st century".
But the Shadow Chancellor didn't explain how Labour would fund the extra tax cuts that the Tories have promised.
Mr Kwarteng has said the Government will borrow £45billion more to fund their tax cuts.
But the £2billion raised from reversing the 45p tax rate still leaves a £43billion hole in Labour's plans if they were to get into No10.
This morning Ms Reeves appeared to say she would fund some of their promises – such as the energy bailout and reduction of the basic rate tax with extra borrowing, telling the BBC: "In emergency situations – and we are absolutely in a national emergency at the moment – you can borrow."
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