Keir Starmer confirms Labour would reverse 'wrongheaded' tax cut for super-rich

The Labour leader, who said his party now had a belief it would win the next general election, said the mini-budget announcements by Chancellor Kwasi Kwarteng had set clear political dividing lines.

He said the Tory policy was for the “rich to get richer” while offering little to ordinary workers but said Labour would reinstate the 45p additional rate of income tax for top earners which Mr Kwarteng abolished from April next year.

But Sir Keir said he backed Mr Kwarteng’s promise to cut the basic rate of income tax from 20p to 19p.

He said people were facing a “very difficult winter” with supermarket customers “looking at the price of food and having to put it back down again” because of soaring costs.

“It’s on the back of 12 years of Tory failure. We’ve had an economy that hasn’t really grown very much for 12 years, we’ve had wages which haven’t really moved for 12 years, because they’ve taken the wrong decisions, they haven’t planned for the future.

“And now we’ve got this decision on Friday to take a very risky approach to the future, driven by this ideology, this argument – wrongheaded argument in my view – that if you simply allow the rich to get richer, somehow that money will trickle down into the pockets of all the rest of us.”

Confirming Labour’s opposition to the removal of the top rate of income tax, he told the BBC’s Sunday with Laura Kuenssberg: “I do not think that the choice to have tax cuts for those that are earning hundreds of thousands of pounds is the right choice when our economy is struggling the way it is, working people are struggling in the way they are … that is the wrong choice.”

Sir Keir refused to set out whether Labour would match the Government’s plans for a two-year freeze on energy bills.

He said Labour’s “fully costed” plan would freeze bills until April, paid for with a windfall tax on oil and gas giants, but the party would have to look at the price forecasts beyond that date.

The Chancellor told the same programme that his tax cuts “favour people right across the income scale” amid accusations they mainly help the rich.

Mr Kwarteng hinted more tax cuts could be on the way.

Analysis suggests the measures, which include abolishing the top rate of income tax for the highest earners, will see only the incomes of the wealthiest households grow while most people will be worse off.

But Mr Kwarteng insisted he is “focused on tax cuts across the board”.

When it was put to him that his measures “favour overwhelmingly people at the very top”, Mr Kwarteng said: “They favour people right across the income scale.”

Three days after his fiscal statement, the Chancellor also indicated his announcements were just the beginning of his agenda designed to revive the UK’s stagnant economy.

He said: “We’ve only been here 19 days. I want to see, over the next year, people retain more of their income because I believe that it’s the British people that are going to drive this economy.”

Mr Kwarteng and Prime Minister Liz Truss could continue their spree in the New Year with possible further reductions in income tax and the loosening of immigration rules and other regulations.

The Chancellor brushed off questions about the markets’ reaction to his mini-budget.

The £45 billion tax-slashing package was met with alarm by leading economists, some Tory MPs and financial markets – with the pound tumbling to fresh 37-year lows.

Asked whether he was nervous about the diving pound, falling stock markets and rising cost of government borrowing, Mr Kwarteng said: “We’ve got to have a much more front-footed approach to growth and that’s what my Friday statement was all about.

“I think that if we can get some of the reforms … if we get business back on its feet, we can get this country moving and we can grow our economy, and that’s what my focus is 100% about”.

He refused to comment on market movements.