Labour and Tories clash on economy in first weekend of election campaigning

The Tories and Labour clashed over the economy on Saturday as the first weekend of the election campaign got underway.

The Chancellor Jeremy Hunt hinted at tax breaks for high earners while his opposite number, Rachel Reeves, insisted she had "no plans" to raise the burden on working people.

Mr Hunt signalled the Conservatives would seek to end the impact of tapering of personal allowances on larger incomes while Rachel Reeves vowed to deliver financial stability with a Thatcher-style commitment to "sound money".

Workers lose £1 of their tax-free personal allowance for every £2 that their earnings go above £100,000, and anyone on more than £125,140 gets no allowance.

In an apparent bid to draw dividing lines with Labour, Mr Hunt used an interview with the Telegraph newspaper to dangle the prospect of a change to the current system.

"If you look at the distortions in the tax system between £50,000 and £125,000, they are bad economically because they disincentivise people from doing what we need, which is to work, work harder. And we are the party of hard work," he said.

Mr Hunt also branded inheritance tax "profoundly anti-Conservative" but refused to be drawn on whether cuts to death duties would feature in the party manifesto.

But Ms Reeves accused the Tories of making £64bn of unfunded spending commitments in a “desperate” effort to rescue their general election campaign.

Speaking to the Observer newspaper, Ms Reeves said that what appeared to be pledges to slash taxes were reminiscent of Liz Truss’s catastrophic mini-budget.

She said: “After a chaotic start to their campaign, the Conservatives are now throwing around billions of pounds of unfunded tax cuts in a desperate attempt to cling onto power.

“Rishi Sunak and Jeremy Hunt’s behaviour is not only desperate, but also reckless and irresponsible and shows they have learned absolutely nothing from Liz Truss’s disastrous mini-budget that crashed the economy.

“The past 72 hours are the clearest sign yet that the biggest threat to the economy is five more years of Conservative chaos.”

The influential IFS think tank said the dire state of the public finances would "hang over the election campaign like a dark cloud" as it repeated its warnings that whichever party wins the election will face major challenges and trade-offs.

However, Labour faced a backlash by unions on its decision to rebrand its package of workers' rights pledges.

Sir Keir denied he was weakening policies on areas like zero-hours contracts, parental leave and sick pay after Unite general secretary Sharon Graham said the plans had "more holes than Swiss cheese".

It comes after the latest flare-up in a row over Labour's New Deal for Working People, following reports it would go through a formal consultation process with businesses - potentially delaying or toning down the pledges.

On Friday, Labour rebranded the New Deal as "Labour's plan to make work pay".

During a visit to Staffordshire on Saturday, Sir Keir insisted: "We have come to an agreement with the trade unions on the new deal for working people.

"There's been no watering down.”

In turn, a minister was forced to deny Mr Sunak was "taking the day off" from the campaign.

Mr Sunak met local veterans in Yorkshire and then later campaigned in Carshalton, south London.

Asked whether the PM was “taking the day off” from the campaign trail after a whistle stop tour around the UK earlier this week, Treasury minister Bim Afolami insisted on Sky News that was not the case.