Daisy Cooper urges windfall tax on banks as Badenoch rejects one

Conservatives pledge to scrap inheritance tax on family homes

In setting out her party’s policy, Liberal Democrat leader Daisy Cooper said: “It’s outrageous that while households have been grappling with the cost-of-living crisis, the big banks have benefited from a taxpayer-funded windfall worth billions.” Trade unions and the Liberal Democrats have urged the government to raise money by putting a windfall tax on banks, which have reported large profits in recent years. She said the money raised from putting higher taxes on the bank could go towards reducing the cost of petrol and diesel and transport fares. Badenoch dismissed this suggestion, arguing it would hit bank shareholders, including people’s pension funds.

The Conservatives have recently announced plans to scrap inheritance tax on family homes and allow couples to leave £1m tax-free. The party has also pledged to scrap a rule that sees parents in England earning more than £100,000 a year lose out on childcare support. Asked if the Conservatives were the party for the rich, Badenoch told the BBC her policies would “help everyone.”

Healey is due to set out tax and spending plans on October 28, the first Budget since Andy Burnham became prime minister. Healey has come under pressure to set out how he will boost defence funding to 3% of national income by 2030, although an announcement is not expected until the government’s spending review next year. The Budget is also unlikely to include details about any changes to the welfare system; those are expected once former Cabinet Minister Alan Milburn produces his review into young people and work.

Kemi Badenoch used a speech in central London on October 20 to press Labour to reduce public spending before Chancellor John Healey’s October 28 Budget. She accused the governing party of lacking the courage to make cuts she said were needed to reduce debt and fund defence. Badenoch said Healey was hoping to deliver a “nothing to see here Budget” next week, but added: “Britain cannot afford to do as little as possible.”

Badenoch said the Conservatives would reduce borrowing by finding £70bn in savings, including through cuts to the welfare bill. Under the Conservatives’ “golden economic rule,” half of the proposed savings would go toward reducing the deficit. Badenoch said: “Cuts are never easy but they are much easier to accept if what you are doing is fair.” She described that approach as fair to taxpayers, fair to future generations, and fair to those who really do need support.

On welfare, Badenoch said: “Quite frankly, getting people off welfare is doing something for them… the best welfare is a well-paying job.” Pressed on whether she would make changes to the triple lock to reduce the amount spent on pensions, she said she did not want to see “pensioner poverty” and that there were other things the party could do to grow the economy.

The most recent figures show that in August government borrowing stood at £18.3bn. The government is paying £8.8bn on its debt, the highest level since records began in 1997.

Badenoch said: “If Labour’s plan is to kick tough decisions into the long grass, come out with tiny bits of micro-policy, put up a few taxes, spend a bit more on welfare, and hope nobody notices before the next election, they are kidding themselves.” She said Labour’s plans required “huge cuts to the public sector” in 2029 and that the party would call an election before then. She said: “They are not suddenly going to find the courage to cut spending in the final year of a Parliament right before an election… Investors aren’t buying these fictional cuts either.”

Badenoch noted that the International Monetary Fund had recently praised the UK for its plans to reduce its borrowing, then said: “The IMF clearly don’t know this Labour Party like I do.”

Bridget Phillipson, Labour Party chairwoman, described Badenoch’s solution as “reverse Robin Hood politics – giving tax breaks to the wealthiest while offering nothing to ordinary people”. Responding to Badenoch’s speech, Phillipson said: “Under the Tories debt rocketed, interest rates went up, while family finances and businesses were hammered.”

She added: “Labour has taken the fair decisions to reverse the Conservatives’ decline.” She said the economy was growing, interest rates had fallen and private investment had returned. She also said: “We’re giving people breathing space on the cost of living and delivering everyday fixes to make life that little bit easier.”