... and he’ll hike corporation tax to 26% to fund spending spree on schools

LABOUR wants to raise corporation tax to 26 per cent to fund a spending spree on schools and grants to college students.

Jeremy Corbyn will today announce plans to reverse cuts introduced under the Tories to attract business to Britain.

Corporation tax – the charge on companies’ profits – has been slashed from 28 per cent in 2010 to 19 per cent, and is due to come down to 17 per cent by 2020.

But Labour said it would scrap the cuts and use the extra money to reduce primary class sizes, spend billions on school buildings, and give cash handouts to sixth formers.

Around £580million a year will go on weekly payments of up to £30 for 16 to 18-year-olds who stay in education. The party will also restore grants for university students and scrap fees on courses for adult learners looking to ‘retrain or upskill’.

Under its plans, the headline rate of corporation tax will rise to 21 per cent in 2018-19, 24 per cent in 2019-20 and 26 per cent in 2020-21.

Speaking at an event in Leeds, the party leader will say: ‘We will reverse the Conservatives’ tax giveaways to big business and put money back where it belongs – in our schools, our colleges and our communities.’

The announcement comes as leading economists criticise Labour’s plan to give free school meals to all primary pupils.

Last month the party said that it would start charging VAT on private school fees to cover the £ 900million cost of the school dinners.

A scathing report from the Institute for Fiscal Studies today warns the scheme would create a substantial ‘deadweight loss’ by paying for families who can easily afford the meals and that ‘ policymakers should think carefully about whether this is the best use of resources’.

The report adds: ‘Labour is proposing to take a benefit that is currently means-tested – available only to pupils whose families meet certain criteria of disadvantage – and extend it to all students. Universal programmes can bring benefits, such as removing the stigma that might otherwise prevent eligible students from taking up free meals.

‘However, universal benefits are also costly. Rather than targeting funds at the most disadvantaged, they spread the money across all children, including those whose families are currently paying for school meals.

‘ This “deadweight loss” can be substantial.’

Conservative Chief Secretary to the Treasury David Gauke said yesterday: ‘Jeremy Corbyn can’t deliver any of this – they’re just made-up promises on the back of nonsensical spending plans.

‘He’s spent this damaging tax rise on businesses on 12 different things.’

‘Made-up promises’