Labour announces ‘Tory tax calculator’ ahead of national insurance cut

Labour has announced a so-called Tory tax calculator for the electorate to work out if their taxes are likely to rise even after a cut to national insurance takes effect.

Shadow financial secretary James Murray said “working people are worse off” after 14 years of Conservative rule.

The Opposition party said that, even with a national insurance cut coming into force on January 6, families in Britain were still likely to be £1,200 a year worse off under Tory taxation plans.

The launch of the online tool on Tuesday comes after the UK entered a likely election year, with Prime Minister Rishi Sunak having to send the country to the polls to elect a new Westminster government by January 2025.

Using the domain ToryTaxCalculator.com, Labour said the online tool will allow voters to select their salary band and find out what they will be paying in taxes after the national insurance reduction.

The calculator will be placed in social media adverts and be targeted at people searching about their taxes, party officials said.

The tax burden is at its highest level on record.

According to Labour analysis, since the 2019 election when former Tory prime minister Boris Johnson won a landslide on a manifesto containing a pledge not to increase taxes, there have been 25 tax rises.

The Institute for Fiscal Studies, in the think tank’s economic assessment after Chancellor Jeremy Hunt’s autumn statement in November, said the NI cut “won’t be enough to prevent this from being the biggest tax-raising parliament in modern times”.

Paul Johnson, director of the independent research body, said tax revenue for the Exchequer will continue to rise as ongoing freezes to income tax thresholds mean more people with growing earnings are pushed into paying tax.

From January 6, the main rate of national insurance will be cut by two percentage points to 10%.

Chancellor Jeremy Hunt announced in November that national insurance contributions would fall (Maja Smiejkowska/PA)

But Labour, citing workings by the independent regulator, the Office for Budget Responsibility, said that for every £10 the Tories are taking in tax because of the thresholds freeze, they are only giving £2 back.

Sir Keir Starmer’s party calculates that, as a result, British families will still be £1,200 a year worse off.

Shadow Treasury minister Mr Murray said: “After 14 years of economic failure under the Conservatives, working people are worse off, with wages flatlining and taxes up.

“The tax burden is now set to be the highest on record, with 25 Tory tax rises since the last election alone.

“Never before have working people been asked to pay so much and get so little back.

“It is time for change. We need an election now to give the British public the chance to vote for a changed Labour Party that will change Britain for the better.”

Laura Trott, Chief Secretary to the Treasury, said: “This Conservative Government is cutting taxes for 27 million people and delivering the biggest business tax cut in modern British history.

“Keir Starmer’s commitment to spend £28 billion every year, whilst supposedly cutting debt, will inevitably result in tax rises.

“That is the only way Labour’s sums add up.

“It is the same old fiscally irresponsible, short-term approach from Labour – more borrowing, more spending, and taxpayers footing the bill.”

There has been recent speculation that Mr Sunak could make more attention-grabbing pledges in the spring budget in March, with income tax cuts and the abolition of inheritance tax reportedly being considered ahead of a general election.