Labour will have to “adapt” some of its spending plans following the Budget, the party said as it accused the Government of having “burned down the house” on the public finances.
Wednesday’s announcements saw the Chancellor adopt two key Labour policies – scrapping the “non-dom” tax status and extending the windfall tax on oil and gas companies – that the opposition had hoped would fund its spending commitments if it won the next election.
The move poses a problem for Labour, which said it would not seek to reverse Wednesday’s national insurance cut that was paid for in part by the windfall tax and non-dom changes.
But a spokesman for the party said it remained committed to providing extra NHS appointments and breakfast clubs for every primary school child despite the changes, and would still look to raise money by closing “loopholes” in the windfall tax.
He told reporters that Labour would examine the Government’s proposals and “adapt our funding plans accordingly” before setting them out “in due course”, refusing to be drawn on the details of spending plans but stressing that all the party’s manifesto commitments would be “fully funded, fully costed”.
The party has been keen to put pressure on the Prime Minister and the Chancellor after they both repeatedly rejected proposals to scrap the non-dom status on the grounds it would not raise money.
The spokesman described the decision as a “humiliating U-turn”, while in the Commons, Sir Keir Starmer said it was “a desperate move” after “years of resistance”.
He said: “Has there ever been a more obvious example of a Government that is totally bereft of ideas?
“And if they’re sincere in support of this policy now, then the question they must answer today is why did they not do it earlier? Why did they not stand up to their friends, their funders and their family?
“Because if they had followed Labour’s example, 3.8 million extra operations would have taken place by now, 1.3 million emergency dental appointments, free breakfast clubs for nearly 4.5 million children. But if instead this is just another short-term, cynical political gimmick then honestly, what is the point of them?”
After the statement, the party spokesman was keen to emphasise the difficult inheritance Labour would face if it won the next election, and laid the blame for this inheritance at the Conservatives’ door.
He said: “We are under no illusions about how bad the inheritance will be if we are to win the next election.
“They have literally burned the house down when it comes to both the public finances and public services.”