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Labour held back from criticising any of the policies outlined by Jeremy Hunt in his Autumn Statement on Wednesday, as the UK’s main opposition party sought to avoid traps set by the ruling Conservatives ahead of the next election.
Responding to the chancellor in the House of Commons, shadow chancellor Rachel Reeves did not challenge his announcement of a 2 percentage point cut in the main rate of national insurance. She said she had “long argued that taxes on working people are too high”.
Reeves said stealth increases in the amount of tax paid by working people — caused in large part by “fiscal drag” — had led to the equivalent of a 10p increase in national insurance payments, and that the cuts set out by the government would not “remotely” compensate for the rise.
Fiscal drag causes households to pay a higher rate of income tax because of the government’s failure to lift tax thresholds in line with wage inflation.
With a general election expected next year, Labour’s refusal to criticise any of the policies announced by Hunt underscores how closely aligned the two party’s economic visions have become.
Labour holds a roughly 20-point polling over the Tories, but both parties are seeking to convince voters that they can boost growth without committing to increased taxation or borrowing.
It also points to Labour’s wariness of being drawn into any traps set by a government that is aiming to paint the party as lacking economic competence and liable to borrow money.
One Labour official described Hunt’s policy announcement as “technocratic stuff” that the party would “mostly support”.
Reeves also said she supported the government’s decision to make business investment tax relief permanent, noting that her party had called for the move. But she added that it “doesn’t make up for the years of uncertainty that businesses have faced with taxes going up and down like a yo-yo”.
The shadow chancellor also did not criticise Hunt’s announcement of welfare cuts and a crackdown on benefit claimants who failed to accept jobs they were offered by the government.
“If we’re going to grow the economy, we must get more people into work,” she said, adding that Labour had long argued for the Work Capability Assessment to be replaced because “right now it is discouraging people from seeking work”.
Her response differed from that of some Labour MPs, who jeered when Hunt announced the crackdown in his speech.
Instead, Reeves claimed the Conservatives had nabbed policy proposals set out by Labour and targeted what she said was the Tories’ weak record after 13 years in power.
Responding to the government’s announcement of pension system reform, Reeves said Labour would go further by encouraging pension pots to be invested in British start-ups if it won the election.
She also said the Tories were “following Labour’s lead” in offering to reduce the bills of homeowners in communities that host new energy infrastructure.
Meanwhile, Sarah Olney, Liberal Democrat Treasury spokesperson, said the Autumn Statement “won’t even touch the sides” for working people and lamented a “deafening silence on health”.
“These dismal forecasts show the economy is on life support and reducing NHS waiting lists is the shot in the arm needed,” she said. “Today has been more stale nonsense from a Conservative government out of touch and out of ideas.”