Shadow chancellor Rachel Reeves has promised that there will be “no additional tax rises” beyond those she has set out if Labour wins the general election.
In her first major speech of the election campaign, Ms Reeves said that every Labour policy “will be fully funded and fully costed – no ifs, no ands, no buts”.
But the Institute of Fiscal Studies (IFS), an independent think tank, has warned that whoever wins may have to raise taxes or cut spending.
Prime Minister Rishi Sunak claimed that Labour’s plans will cost “every working family” £2,000 each.
Speaking at the engineering giant Rolls-Royce in Derby, Ms Reeves reiterated Labour’s plans to recruit thousands of additional teachers and introduce 40,000 NHS appointments every week.
She said that Labour’s plan to restore stability to the economy would be “underpinned by robust fiscal rules”, which are self-imposed, such as getting debt falling as a share of national income by the end of the parliament.
However, the IFS has said that the state of public finances hangs over the election campaign “like a dark cloud” and the winning party may have to reduce spending or lift taxes – something that Ms Reeves ruled out on Tuesday.
It is unlikely that there will be a Budget before September if Labour wins the election. Ms Reeves said Labour would not hold a Budget with an accompanying independent forecast by the Office for Budget Responsibility (OBR).
This is because, Ms Reeves said, the OBR requires 10 weeks’ notice to provide an independent forecast based on the government’s plans.
Ms Reeves used the speech to cast Labour as “the natural partner of business”.
She said: “A few years ago, you might not have expected to have heard these things from the Labour party, think how far we have come in four short years.
On Tuesday, 121 former and current business leaders signed a letter endorsing the Labour’s economic plans ahead of the general election, saying it is “time for a change”.
In a letter published in The Times newspaper on Tuesday, 121 founders, chief executives, and former leaders at a range of financial services, retail and manufacturing firms said Labour has changed and “wants to work with business” on long-term growth.
As well as recruiting more teachers and providing extra NHS appointments, Labour has promised to take on 13,000 additional police and community officers.
It said it will raise some of the money by ending the VAT exemption for private schools.
Labour also said it will fund its spending plans through a “proper windfall tax” on profits made by oil and gas companies, which will rise from 75% to 78%.
In addition, it has promised to raise £5bn a year by tackling tax avoidance and evasion and £2.6bn by closing “loopholes” in the government’s plans to abolish non-dom exemptions.
Non-doms are UK residents whose permanent home for tax purposes is abroad, meaning they do not have to pay UK tax on money they earn overseas.
Ms Reeves reiterated that corporation tax, which is paid by businesses, will be capped at the current rate of 25%.
But she added that Labour would “act” if “our competitiveness came under threat”.
Work and Pensions Secretary Mel Stride, said that Labour “do not have the courage or conviction to name a single tax they would cut”.
Over the weekend, the Conservatives said that they would increase the the tax-free pension allowance.
Both the Conservatives and Labour have pledged to stick with the so-called Triple Lock guarantee. This means that pensions increase every year in line with either the inflation rate, earnings growth or 2.5% – whichever is higher.
Labour called the Conservative’s tax-free pension allowances a “desperate move”.
But Mr Stride said: “Only Rishi Sunak and the Conservatives have a clear plan, backed by bold action, to end the double tax on work and ensure pensioners who have worked hard their entire lives will have a new tax-free threshold to protect them.”
The Lib Dems told BBC News that businesses are “crying out for stability and certainty after years of the Conservatives’ chaos and mismanagement”.
“The Liberal Democrats would launch an industrial strategy to boost investment and reform the broken business rates system to support our high streets,” a spokesperson said.
The Green Party of England and Wales said it “would invest in the technologies we need to ensure a sustainable and secure future”.
“We need to ensure our economy works in a way that safeguards our climate and enables nature to flourish,” co-leader Adrian Ramsay said.
The Scottish National Party’s Drew Hendry accused Labour of “ignoring the most fundamental reason for the economic decline of the United Kingdom – Britain is broken and Brexit broke it”, adding: “Only the SNP will fight for a future back at the heart of the European Union.”
Plaid Cymru Treasury spokesman Ben Lake said his party would “invest in the Welsh economy to drive growth and reduce inequality”.
