Rachel Reeves has announced a Labour government would not increase corporation tax during its first term in office.
Speaking on Thursday at a London conference designed to woo business leaders, the shadow chancellor said it would be capped at the current rate of 25%.
“We will campaign as a pro-business party – and we will govern as a pro-business party,” she said.
“We will cap the headline rate of corporation tax at its current rate of 25% for the next parliament.”
Labour’s 2019 general election manifesto had pledged to increase the rate to 26%.
Jeremy Hunt increased the main corporation tax rate from 19% to 25% last year - overturning Liz Truss’s previous decision to cut it.
Reeves also attacked the Conservatives for having made 26 changes to the tax since 2019.
And Labour pointed to a report from the Institute for Fiscal Studies think-tank which warned this provided “no stability, no certainty, and no sense of a wider plan”.
It comes after Reeves also announced Labour would not bring back the cap on bankers’ bonuses, just three months after attacking Rishi Sunak for scrapping it.
Defending the move today, she said the “last thing we need is more chopping and changing” of rules.
“We are going to bring stability to business and that’s why we won’t be bringing that back,′ she said.
Reeves also dodged questions over whether Labour’s promise to spend £28bn a year on green investment was about to be ditched.
First announced in 2021, the policy has been watered down over time amid fears the Conservatives will claim it is evidence of irresponsible spending.
Reeves said; “My number one commitment is to fiscal and economic stability and I won’t do anything that plays fast and loose with the public finances.
“Of course we have to adjust our plans to the circumstances we will inherit.”
Labour has set out strict fiscal rules which include paying for day-to-day expenditure through tax receipts and getting debt down as a share of the economy.