In 2020, Keir Starmer's Labour leadership campaign was underscored by a pledge that resonated deeply with voters seeking economic justice. He committed to reversing the Conservative cuts to corporation tax, a move designed to ensure the wealthiest entities paid their fair share and to clamp down on tax avoidance. This promise was a beacon of hope for those disillusioned by years of austerity and widening inequality.

Fast forward to 2024, and the narrative has shifted dramatically. Shadow Chancellor Rachel Reeves has declared that Labour will cap corporation tax at 25%, with the possibility of reducing it further to enhance "competitiveness." This stance is a significant departure from Starmer's original pledge and raises serious questions about his commitment to Labour's core values. The claim that this rate "strikes the correct balance between the needs of our public finances and the demands of a competitive global economy" seems like a hollow justification for reneging on a key promise.

What is even more concerning is the underlying message this U-turn sends to the electorate: that Labour's pledges are flexible, subject to change when convenient. This not only undermines public trust but also emboldens critics who accuse Labour of lacking the stability and certainty needed for sound governance. The Conservative accusation that Starmer might secretly plan a tax hike post-election only fuels this perception.

A recent poll by Nomura, which surveyed 70 City institutions, reveals a deep skepticism among investors regarding Labour's tax promises. A significant majority, around six in ten, believe that Starmer will eventually raise corporation and income taxes if Labour wins power. This distrust indicates a broader crisis of confidence in Labour's ability to stay true to its word.

SOURCES

1st Video: Leadership Hustings Live from Cardiff - https://www.youtube.com/watch?v=UewxeMPnkGk&t=1580s

2nd Video: Labour’s Bungs To Bankers And Corporations - https://www.youtube.com/watch?v=lN9-m-m7cno

3. Labour will break promises on income tax, City fears - https://www.telegraph.co.uk/business/2024/06/05/labour-will-break-promises-income-tax-city-fears/

4. Keir Starmer’s Ten Pledges - https://www.clpd.org.uk/resource/keir-starmer-10-pledges/