A Labour government would reinstate the top rate of income tax and use the revenue to hire more NHS workers, shadow chancellor Rachel Reeves has said.
In her speech at the Labour Party annual conference today, Reeves said the next Labour government would double the number of medical students and district nurses qualifying every year, as well as invest in the training of more than 5,000 new health visitors and 10,000 more nursing and midwife placements.
She accused Prime Minister Liz Truss and Chancellor Kwasi Kwarteng of behaving like “desperate gamblers in a casino” when they announced sweeping tax cuts last week, including the abolition of the top-rate of income tax for those earning £150,000 a year or more.
However, Labour would keep the 1p cut to the basic rate of income tax announced in Kwarteng’s mini-Budget last week.
Reeves, a former economist at the Bank of England, warned the government was “putting our economy in danger”. Following last week’s tax cuts announcements, the value of the pound has fallen dramatically, dropping to $1.03 – its lowest level against the US dollar.
In contrast to the Conservatives’ tax cuts for top-earners, Labour would invest in the NHS, skills development and the “industries of the future” to create a stronger and fairer economy, said Reeves.
“I’ll tell you what a growing economy needs. Rising wages, so that money flows back into vibrant high streets. Parents with the time to thrive at work and spend time with their children. Families with enough savings to weather a storm. And people feeling the confidence to take risks, to change career, to learn new skills, or to start a business,” she said.
“So, with Labour, there will be no bonfire of workers’ rights as the Tories intend… we will introduce a new deal for working people, with strengthened rights fit for the times we are in.”
Reeves also pledged that a Labour government would set the minimum wage at a level that reflects the real cost of living and replace business rates with a fairer system so that employers have more free cash to equip workers with the skills they require. It would also form an economic council with unions and businesses, she said.
Labour’s plans to invest in the NHS and form more of a partnership with unions and businesses were welcomed by TUC general secretary Frances O’Grady.
She said: “We need a government that’s on the side of working people. The policies Rachel Reeves set out today can help deliver a real pay rise for everyone – and are a stark contrast to the Conservatives’ tax cuts for the super-rich. This is a proper plan for a high-wage Britain.
“The NHS is suffering the worst staffing crisis in its in history. This funded plan will help cut workloads, tackle the backlog and help hospitals plan for the future. NHS staff desperately need a decent pay rise.”