Nandy says ‘promises matter’ but declines to reveal tax pledge position

A Cabinet minister insisted “promises matter” but declined to say whether she agreed with Labour’s deputy leader that the UK Government should stick to its pledges on tax at the Budget.

Culture Secretary Lisa Nandy warned that “difficult decisions” were required as she faced questions about her former Cabinet colleague Lucy Powell’s call for the party’s manifesto commitments to be honoured.

Labour promised during the general election not to raise income tax, VAT or national insurance.

But a refusal across Government to recommit to this pledge in recent days has fuelled speculation that the Chancellor is preparing to increase income tax as she tries to balance the books.

Asked whether she agreed with Ms Powell, the former Commons Leader, Ms Nandy told Sky News’s Sunday Morning With Trevor Phillips programme: “Look, we take our promises very, very seriously and we did make specific commitments around tax in the manifesto.

“But we were also elected on a promise to change this country, and through the record investment that we’ve been able to put into the National Health Service, we’re seeing waiting times coming down and more appointments being made available on a whole range of measures.

“We’re delivering the change that people want to see. We are going to have to make difficult decisions. I’m not going to write the Budget live on air.”

Earlier this week, Ms Powell suggested breaking the pledge not to raise income tax, national insurance or VAT would damage “trust in politics”.

The former Commons leader told BBC Radio 5 Live: “We should be following through on our manifesto, of course. There’s no question about that.”

She continued: “Trust in politics is a key part of that because if we’re to take the country with us then they’ve got to trust us and that’s really important too.”

Challenging

Speaking on Sunday, Ms Nandy said: “I agree with Lucy Powell that promises matter.

“I also agree with her that the situation that this Government inherited is very challenging.

“We’ve got to make fair choices, and like she said in answer to a question about this, she will of course always support the Chancellor to make the right decisions in the interest of the country.”

Rachel Reeves could use a rise in income tax to help plug what the National Institute of Economic and Social Research said is a £50 billion black hole in public finances and give herself a larger fiscal headroom.

The Chancellor is also rumoured to be considering a proposal by the Resolution Foundation, a think tank with close links to the Treasury, to increase income tax by 2p on the pound while cutting national insurance by the same amount.

The move was framed by the foundation as a “switch” plan that would help to iron out “unfairness” in the system by spreading the tax burden across a wider group, including pensioners and landlords.