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Tony Blair has urged critics of Keir Starmer to “relax him a bit” and backed his stance on business taxes, after backlash over Starmer’s comments that seemed to suggest that Labor was against taxing corporations to pay for the pandemic.
The Labor Party clarified its position on Thursday, with shadow Chancellor Anneliese Dodds and shadow Foreign Secretary Lisa Nandy publicly suggesting that the party was prepared to back business tax increases as long as they were not implemented immediately.
Party sources said they would also consider any plans put forth by Rishi Sunak in next week’s budget for an unexpected tax on companies that have benefited from the pandemic. “We will see the detail of what the chancellor proposes, but we do not believe that there should be tax increases at this time,” said a source.
Starmer’s comments on Wednesday that “now is not the time to raise taxes on families and businesses” irritated some colleagues who felt they could be embroiled in opposing plans proposed by the chancellor to increase corporate tax in the US. next week’s budget, a policy Labor had previously proposed. .
In an interview with The Guardian, Blair, the last Labor leader to win a general election, praised Starmer and warned critics of his party not to underestimate the challenges of being the leader of the opposition during the pandemic.
“I think where people have to give him a little slack and be fair to the guy, it’s the government that matters right now,” he said. “The public has no interest in speaking as if you are in normal political times, because they know you are not.
“I think he has done a very good job. I think he’s actually been quite judicious in being critical where he needs to be, constructive most of the time, ”said Blair.
When asked about Starmer’s remarks on taxes, which were criticized by left-wing MPs and grassroots campaign group Momentum, he said: “I think it’s perfectly sensible to say that. I always used to tell people when I was running the Labor Party, the problem with the Labor Party is not that people don’t think you’re going to raise their taxes. “
Former Conservative leader David Cameron added his voice to those who warned Sunak not to seek to balance the books, writing in the Times that immediate tax increases “would make no sense at all.”
Blair predicted that the upcoming general election would not be contested on the territory of taxes and spending that has dominated many recent contests, or on the government’s handling of the pandemic, but rather on “who has the best plan for the future,” including how to respond to rapid technological changes.
Labor strategists are wary of being drawn into a complicated debate over who should pay for the crisis, as many international experts warn against tax increases or spending cuts while economies are still in deep recession.
Answering questions after a pre-budget speech to the UCL Institute for Global Prosperity on Thursday, Dodds said: “If the government says it will immediately impose fiscal changes in the UK, I think it is the wrong decision. That goes against the vast majority of what the expert commentators say. If we’re talking about a longer-term trajectory, let’s have that discussion, let’s make sure we have that more effective tax system. “
However, he warned the government that measures to impose corporate tax increases would deal a “hammer blow” to families across the country as they grapple with the consequences of Covid-19.
“That is the wrong decision to make right now,” he said. “The UK government’s focus should be on jobs, growth and preservation of economic activity. We have had the worst economic crisis of any G7 country, so we must focus on reversing that decline. “
Nandy, speaking on the BBC, said Labor still believed it would be possible to raise corporate tax without compromising UK competitiveness, but added: “There will be a time to raise taxes, do it fairly and pay off the debt, but that time is not now. “
Voices from the political division and mainstream economists have generally come together on the need to delay tax increases until an economic recovery from the worst recession in 300 years is fully entrenched, despite record public borrowing. caused by the pandemic.
Sunak is expected to confirm the largest peacetime deficit in public finances in next week’s budget, as the cost of responding to Covid pushes the budget deficit to close to £ 400bn this year.
However, pressure is mounting for a tougher stance as the pandemic increases inequality rates and generates windfall profits for some companies, including outsourcing giant Serco, which said Thursday that it had raised £ 400 million from the Covid-related work, including government management. test and trace program.
