Labour says it will oppose any hikes in corporation tax on big business, in an extraordinary political reversal ahead of next week’s Budget.
The party also did not rule out voting against a windfall tax on supermarkets, to fund the Covid-19 recovery – which Rishi Sunak is believed to be planning.
At the last election, Labour called for corporation tax to rise sharply, while the Conservatives – to the ridicule of most economists – claimed cuts could actually increase revenue.
Now the Chancellor is expected to put the country on the path to increasing the rate from 19 per cent to 23 per cent by the end of the parliament, or even as high as 25 per cent.
But, asked if the U-turn had Labour support, Treasury spokesperson James Murray said: “This is not the time to consider tax rises, we are in the middle of an economic crisis.”
Asked if Labour could vote against a windfall tax on the food giants – despite the billions it would raise for spending priorities – Mr Murray added: “Let’s see what the government put out in the Budget next week.
“What the government should be focusing on now is investment in growth to try to get the economy back on its feet.”
The stance is likely to fuel criticism of what some Labour MPs and supporters see as Keir Starmer’s caution, after his refusal to for under-fire ministers to quit or criticise the Brexit trade deal.
The Labour leader has sought to draw a line under the Corbyn years by reining in what voters rejected as unrealistic pledges made in the 2019 election manifesto.