Tax policy at the party conferences

It was not long ago that each of the main parties set out their tax policy platforms for the General Election. This article looks at what more we learned about each party’s tax policy agenda during party conference season.

Given the proximity to Labour’s first fiscal event on 30 October 2024, no new tax policy announcements were expected at conference. But with the Chancellor Rachel Reeves on record as saying taxes would have to rise in the Autumn Budget, some thought the occasion might provide a clue to where these tax rises might hit. Unfortunately, few hints materialised. 

In her speech to conference, Reeves stated that she will stick to Labour’s manifesto commitments not to increase taxes on working people, reiterating there would be no increase to the basic, higher or additional rates of income tax, national insurance or VAT. She also repeated Labour’s commitment to cap corporation tax at its current level for the duration of this Parliament.

She confirmed the manifesto tax raising commitments to extend the Energy Profits Levy, introduce VAT on private school fees and replace the non-dom tax regime. Labour had estimated the latter policy would raise up to £1 billion, however there has been recent press speculation that the party is considering amending its non-dom proposals following reports that the measures may fail to raise any money at all. (As an aside, the Treasury responded by describing these reports as speculation, not Government policy and said the Office for Budget Responsibility will certify the costings of all measures announced in the Budget in the usual way).

During conference Labour released further details on how it plans to fulfill its election commitment to Close the Tax Gap. This includes strengthening the powers of HMRC and recruiting 5,000 new tax compliance officers. We discussed this in more depth in the previous edition of Tax Matters Digest.

During his speech to conference, Sir Keir Starmer restated Labour’s manifesto commitment to replace the Apprenticeship Levy with a new Growth and Skills Levy. Whilst the detail is still missing, you can read what we do know of the proposed regime in the last edition of Tax Matters Digest.   

It is understandable why, absent a General Election, less attention is given to tax statements by the other parties at conference. Although they are not in power, we should still pay attention to what is being said. Opposition parties can often provide a source of inspiration - or political pressure - for governments developing their own tax agendas. Indeed, this happened earlier in the year when the then-Conservative Government adopted Labour’s flagship tax policy of non-dom reform in the Spring Budget. So, what did we learn about tax policy from the other party conferences?

Tax policy statements at the Conservative party conference

Shadow Chancellor Jeremy Hunt did not make a speech to conference, but in a platform interview he defended his record on tax as Chancellor and expressed concern on speculation that Labour might increase capital gains tax, saying such a move could deter investment.

With the party in the throes of a leadership election, the spotlight was on the final four candidates at the time (Kemi Badenoch, James Cleverly, Robert Jenrick and Tom Tugendhat) who made speeches to conference and were active in fringe events. Unsurprisingly all four contenders stated their opposition to Labour’s policy of charging VAT on private school fees.

It remains to be seen who will lead the party going forward and whose vision on tax will prevail. We are unlikely to see a firm stance on tax policy from the party until 2025 at the earliest, once the new leader is established in role. 

Tax policy statements at the Liberal Democrat party conference

There was no mention of tax in Liberal Democrat Leader Ed Davey’s speech to conference, but in an interview with the BBC the weekend of the conference, Davey said he would like to see inheritance tax reformed to ensure the “better-off pay more”.

Liberal Democrat sources later said that people who inherit more than £10 million effectively pay half as much as those inheriting £1 million. They indicated that some of that should be clawed back from the ‘super rich’ by closing loopholes. No further details were given. These statements go further than the Liberal Democrat tax manifesto which did not mention inheritance tax.

In other interviews during conference week, Davey reiterated his manifesto policies of restoring the Bank Surcharge and Bank Levy revenue to 2016 levels in real terms and “fairly reforming capital gains tax to close loopholes exploited by the super wealthy”.

In her speech to conference Munira Wilson, Liberal Democrat spokesperson for Education, repeated the party’s position that it opposed Labour’s plans to charge VAT on private school fees.

A common theme emerging from the other party conferences were calls to implement a wealth tax. The SNP’s Trade Union Group (SNPTUG) tabled a motion at conference calling for the party to explore (amongst other things) realistic options for a wealth tax. The motion was passed unanimously. Green party co-Leader Adrian Ramsay said in his speech to conference: “I proudly championed a wealth tax during the general election campaign, and I will do the same on Budget Day”.

Reeves did not mention the issue of wealth taxes at the Labour conference, but in a pre-conference interview with the Sunday Times on 22 September 2024, she ruled out a bespoke wealth tax saying “I’m not looking at creating some new tax, or a wealth tax”.

Despite this policy rejection, on the final day of the Labour party conference on 25 September 2024, delegates passed a non-binding motion calling for the Government to reverse its decision to means test the winter fuel payment and (amongst other things) instead introduce a wealth tax on the top 1 percent, an excess profits tax, to equalise capital gains tax with income tax and to apply national insurance to investment income.

Although Reeves has explicitly rejected a wealth tax on several occasions, the fact that a global wealth tax is currently being discussed at supra-national level including the UN and the OECD, means it is unlikely that the debate will go away any time soon.

With party conference season over, all eyes now turn to Labour’s first fiscal event in 14 years on 30 October 2024. You can read our predictions on what the Chancellor may have tucked in her red box. Join us live on Budget day for our initial reactions to the announcements, and don’t forget to register for our Webinar on Friday 1 November at 12pm where we will explore the Budget tax measures in more depth. 

For further information please contact:

• Sharon Baynham
• Stefanie Redmond