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Shadow Chancellor tells LBC tax hikes 'not a sensible way forward'

28 February 2021, 12:10 | Updated: 28 February 2021, 12:17

By Maddie Goodfellow

Shadow Chancellor Anneliese Dodds has told LBC ahead of the budget that raising taxes is "not a sensible way forward", saying it is "the wrong approach in the middle of an economic crisis".

Speaking to LBC's Swarbrick on Sunday ahead of the budget on Wednesday, Ms Dodds said: "It is Labour's view that actually we really should see from the Chancellor a resolute determination to protect jobs and businesses.

"Right now, that should be at the top of his mind and instead, sadly, what we seem to see is actually a focus on the next General Election.

"We understand the Chancellor has been saying to his MPs that he wants to change taxation, and in the long term there are changes that Labour want to see too.

"But right now that is the wrong approach when we have had the biggest crisis of any major economy. He should be focused on jobs and businesses right now, that is what he should be underlining.

"We are already seeing 5 per cent added on to council tax for families under this Conservative government. It is the wrong thing to be doing in the middle of such an economic crisis."

Her comments come amid suggestions that Chancellor Rishi Sunak is looking to raise some taxes to tackle the huge debts incurred during the pandemic.

Reports have suggested that Chancellor Rishi Sunak is considering raising corporation tax to as much as 25% - from 19% - in his Budget on Wednesday.

Pushed by Tom on what Labour's view is on raising taxes and whether hikes should be imminent, Ms Dodds said: "We would need to see the detail here.

"You only need to look at the situation of the self-employed, they have had an awful time.

"So many people during this crisis have not been able to access the support that was meant to be there for them because of a 'computer says no' mentality from this government.

"We really would need to see the detail and see if anything will be done to improve the security provided to self-employed people because they have had such a hard time."

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Tom then pushed her again on the issue of tax hikes, asking if self-employed people should have taxes raised now or in the future, to which Ms Dodds responded: "I do not think that immediate tax rises right now is a sensible way forward.

"Particularly is this is only being done so the Chancellor can have a bonanza before the next election.

"The UK is quite uncommon in this, in other countries Chancellors and Finance Ministers are not saying they will be increasing tax immediately and instead they are focused on boosting growth and keeping people in work and businesses functioning.

"This really is a very strange approach from a Conservative Chancellor."

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Her comments come as Director General of the Confederation of British Industry Tony Danker, exclusively told Swarbrick on Sunday that he thinks Rishi Sunak;s reported plans to increase some taxes could harm business confidence and growth.

Pressed on the possibility of higher taxes, the CBI leader said: “If your question is do we think that businesses and the wealthier in society should be paying more tax overtime, once the economy is growing, in order to help tackle the debt: absolutely.

“I think it is risky to do that now. We don’t have a reopening let alone a recovery. The objective has to be stimulating business confidence, investment, growth and jobs. So I would be cautious about doing that now."

"That is the real test of the budget and I hope we stimulate the recovery rather than stifle it."

Also speaking to LBC’s Swarbrick on Sunday, Luke Johnson, Chairman of Gail's Artisan Bakery and the Brighton Pier Group, said the chancellor must avoid “knee-jerk tax increases that will discourage people from taking a risk” and growing businesses.

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