Keir Starmer has vowed to reinstate the top tax band for people who are paid more than £150,000 a year while keeping the planned cut in the basic rate of income tax, minutes after another senior Labour figure said both should be restored.
On the first day of the Labour party conference in Liverpool, Starmer said it was “hugely divisive” of ministers to hand out a tax cut to the extremely well paid, and said he would reverse the scrapping of the additional rate – 45% – on the highest earners.
Starmer added that bringing forward the cut to the basic tax rate from 20% to 19% was correct and Labour wanted to “reduce the tax burden on working people”.
But he faced pressure from Andy Burnham, the mayor of Greater Manchester, who said Labour should oppose both tax moves outlined by the chancellor, Kwasi Kwarteng, in Friday’s mini-budget.
Burnham said Labour should go further and reverse the cut in the basic rate as well, because “I don’t think it’s the most targeted way” of helping those struggling most during the cost of living crisis.
“If you cut the 20p rate, it’s not as targeted a measure as doing other things such as supporting people who are at real risk, and those are people on universal credit,” he told Sky News’ Sophy Ridge on Sunday programme.
The clash of views threatens to paint Labour as divided when eyes are turning to its party conference, and how it will respond to the mini-budget and take on the prime minister, Liz Truss.
Starmer said those earning hundreds of thousands of pounds should not get a sizeable tax cut while public services were “on their knees”, and he told the BBC’s Sunday with Laura Kuenssberg programme he would put the 45p tax rate “back up”.
However, the Labour leader said it was “correct” for the 20p rate to fall to 19p next year, and he talked up his chances of winning the keys to Downing Street at the next general election.
Starmer said he had proved he could take unpopular but necessary decisions, pointing to the pace at which he reformed party rules after Jeremy Corbyn’s leadership.
Burnham, criticising what he called an “obscene” handout that was a “flagrant act of vandalism” against social cohesion in Britain, said the billions borrowed to fund the tax cuts should have been used to help boost public sector workers’ pay and increase benefits.
Given the below-inflation rises offered to millions and what Burnham said could be a “wave of industrial action over winter”, he called for the money to be used to help boost the pay packets of NHS and fire service workers. “Lives, honestly, are on the line,” Burnham said.
He was optimistic that Labour’s long spell out of government could be nearing an end, saying as thousands of the party faithful gathered in Liverpool that it was the first party conference since 2010 “where I think it’s odds-on there could be a Labour government in one or two years”.
He encouraged Starmer to be bolder, and he said he was disappointed at the leadership’s reluctance to embrace electoral reform.
