Election 2017: Labour's key manifesto pledges
01:44
Jeremy Corbyn
has been accused of planning to “bankrupt Britain” with a manifesto
that would ramp up debt by £250 billion and stage the biggest tax raid
the country has ever seen.
The Labour leader announced plans for £48.6 billion of extra annual spending commitments paid for by high earners and businesses that would saddle the country with its biggest tax burden since 1950.
His manifesto pledges were immediately picked apart by one of the country’s leading economists, who suggested the tax plans might only raise £20bn, leaving a £28.6bn annual shortfall.
Mr Corbyn, who revealed he would nationalise the UK’s water companies, in addition to the railways, Royal Mail and National Grid, admitted he could not give any figures for how much his 1970s-style nationalisation project would cost.
The Labour leader announced plans for £48.6 billion of extra annual spending commitments paid for by high earners and businesses that would saddle the country with its biggest tax burden since 1950.
His manifesto pledges were immediately picked apart by one of the country’s leading economists, who suggested the tax plans might only raise £20bn, leaving a £28.6bn annual shortfall.
Mr Corbyn, who revealed he would nationalise the UK’s water companies, in addition to the railways, Royal Mail and National Grid, admitted he could not give any figures for how much his 1970s-style nationalisation project would cost.
Journalist booed by Corbyn supporters at manifesto launch after asking about leader's popularity
01:25
The
124-page manifesto, titled For the Many, Not the Few, claims to use a
tax and spend model developed by “world-leading economists”, but a
footnote reveals that one policy - an offshore company property levy -
relies partly on calculations by the satirical magazine Private Eye.
And the official launch of the manifesto - a week after a draft copy was leaked - descended into farce as Mr Corbyn appeared to invent a new policy on the hoof and his shadow chancellor John McDonnell gave an incorrect figure for the size of the deficit.
And the official launch of the manifesto - a week after a draft copy was leaked - descended into farce as Mr Corbyn appeared to invent a new policy on the hoof and his shadow chancellor John McDonnell gave an incorrect figure for the size of the deficit.
The Conservatives described the document as “nonsensical”, while the Centre for Policy Studies thinktank said it was “economically crazy”.
Meanwhile, Len McCluskey, the boss of the Unite union and one of Mr Corbyn’s closest allies, wrote off Labour’s chances of winning the election and said holding on to 200 seats - a loss of 29 seats and its worst result since 1935 - would constitute “a successful campaign”.
Meanwhile, Len McCluskey, the boss of the Unite union and one of Mr Corbyn’s closest allies, wrote off Labour’s chances of winning the election and said holding on to 200 seats - a loss of 29 seats and its worst result since 1935 - would constitute “a successful campaign”.
If they win the election Labour
will bring the threshold for the 45p tax rate down from £150,000 to
£80,000, with a new 50p top rate kicking in at £123,000, affecting 1.3
million workers. It will mean an average increase of £5,300 for those
who will pay it.
Corporation
tax will increase from 19 per cent to 26 per cent and an there will be a
new excessive pay levy on companies paying employees more than
£330,000.
Together with a clampdown on tax avoidance, an extension of stamp duty reserve tax, VAT on private school fees and other tax-raising measures, Labour claim they will raise £48.6bn, but the Institute for Fiscal Studies puts the figure at between £20bn and £30bn, leaving a shortfall of up to £28.6bn.
Together with a clampdown on tax avoidance, an extension of stamp duty reserve tax, VAT on private school fees and other tax-raising measures, Labour claim they will raise £48.6bn, but the Institute for Fiscal Studies puts the figure at between £20bn and £30bn, leaving a shortfall of up to £28.6bn.
Jeremy Corbyn launches Labour election manifesto
01:33
Economists
have pointed to figures that show that increasing corporation tax (and
income tax for high earners) actually reduces the tax yield, as
companies and individuals will find ways to avoid paying.
Paul Johnson, director of IFS, said: “They are looking at raising an awful lot from companies and high earners. The chance of getting £50bn are pretty small. It seems to us is that if they were able to raise that amount that would take tax burden in the UK to its highest level in 70 years."
The tax burden - the amount of tax paid compared with total national income - could rise to around 37 per cent under Labour by 2022, higher than at any time since 1950, according to IFS estimates.
Paul Johnson, director of IFS, said: “They are looking at raising an awful lot from companies and high earners. The chance of getting £50bn are pretty small. It seems to us is that if they were able to raise that amount that would take tax burden in the UK to its highest level in 70 years."
The tax burden - the amount of tax paid compared with total national income - could rise to around 37 per cent under Labour by 2022, higher than at any time since 1950, according to IFS estimates.
A Conservative source said: “Jeremy Corbyn’s plans will bankrupt Britain.”
John O'Connell, chief executive of the TaxPayers' Alliance, said: This entire manifesto is based on the clearly absurd belief that businesses can be repeatedly hammered with massive tax increases and crippled with regulation without any wider impact on the economy, jobs and investment.
John O'Connell, chief executive of the TaxPayers' Alliance, said: This entire manifesto is based on the clearly absurd belief that businesses can be repeatedly hammered with massive tax increases and crippled with regulation without any wider impact on the economy, jobs and investment.
“If even a handful of these disastrous ideas were implemented it would mean misery for the many and employment for the few.”
During his manifesto launch in Bradford, Mr Corbyn said during a question and answer session that a freeze on benefits introduced last year would end under a Labour Government - a decision the House of Commons library estimated would cost around £14billion.
During his manifesto launch in Bradford, Mr Corbyn said during a question and answer session that a freeze on benefits introduced last year would end under a Labour Government - a decision the House of Commons library estimated would cost around £14billion.
Jeremy Corbyn back-pedals on promise to axe benefits freeze
00:43
However,
the manifesto contained no such commitment and an hour later the Labour
leader was forced into an embarrassing about turn, saying the party
will not increase welfare payments across the board and would review the
Conservative Government's changes instead.
Mr McCluskey, who had enthusiastically welcomed the manifesto when it was agreed last week, told the Politico website: “I don't see Labour winning, I think it would be extraordinary. I believe Labour can hold on to 200 seats or so and it will be a successful campaign. It will mean that Theresa May will have had an election, will have increased her majority but not dramatically".
He said the “scale of the task is immense” and there was a problem with the “imagery of Jeremy Corbyn”.
Earlier, Mr McDonnell was asked about his plans to add £250 billion to Britain’s £1.5 trillion national debt in a BBC radio interview yesterday. Asked how big the budget deficit is, he said: “£68 to £70 billion.” The actual figure is £52 billion.
Telegraph
Mr McCluskey, who had enthusiastically welcomed the manifesto when it was agreed last week, told the Politico website: “I don't see Labour winning, I think it would be extraordinary. I believe Labour can hold on to 200 seats or so and it will be a successful campaign. It will mean that Theresa May will have had an election, will have increased her majority but not dramatically".
He said the “scale of the task is immense” and there was a problem with the “imagery of Jeremy Corbyn”.
Earlier, Mr McDonnell was asked about his plans to add £250 billion to Britain’s £1.5 trillion national debt in a BBC radio interview yesterday. Asked how big the budget deficit is, he said: “£68 to £70 billion.” The actual figure is £52 billion.
Telegraph
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