Starmer Says Growth Focus Is Why Labour Doesn’t Plan Bank Tax

(Bloomberg) -- Keir Starmer said Labour’s focus on growth means the party isn’t planning to raise taxes on Britain’s banks, as the opposition leader sought to reassure the financial industry less than a week before an election expected to make him prime minister.

Most Read from Bloomberg

“Nothing in our manifesto requires tax rises, over and above the ones we’ve already set out,” Starmer said in an interview with Bloomberg on Saturday. “It’s not just a question of tax, it’s also because the focus is on growth,” he said.

Starmer, who is on track to become prime minister on July 4 with a sustained 20 point lead in opinion polls over Rishi Sunak, has sought to calm fears that a Labour government would put up taxes on banks and investors. The Institute for Fiscal Studies has warned that both Labour and the Conservatives have “ducked” hard choices on how to pay for their spending promises without raising taxes.

Labour says it doesn’t need to raise taxes beyond manifesto commitments to extend the government’s current windfall tax on energy company profits, taxing private equity bonuses, removing the VAT exemption on private school fees and ending non-domiciled tax status.

Still, some City executives had feared the party would consider a windfall tax on banks, raising the surcharge that lenders pay on top of corporation tax or even reviving the idea of a financial transaction tax.

Labour is relying on economic growth to fund many of its projects, though Starmer wouldn’t say when he would achieve his promise of the highest sustained growth among the Group of Seven nations.

“I’m confident that we can get growth, we have already been talking to global investors for two years or more,” he said in the interview.

Pressed on when he will achieve annual growth of at least 2.5% if Labour won power — an ambition he suggested that the party would aim for — he said he wouldn’t “set arbitrary targets.”

--With assistance from Alex Wickham, Ailbhe Rea and Alex Morales.

Most Read from Bloomberg Businessweek

©2024 Bloomberg L.P.