Labour to declare new tax war on middle class
Corbyn pledges to reverse Tory tax cut Call for 7p rise in National Insurance Plan to print money to pay for spending
LABOUR will today signal a major tax raid on the middle classes as the party shifts even further to the Left.
John McDonnell, Shadow Chancellor and a follower of Karl Marx, will use his party conference speech to call for a ‘new economics’ to redistribute wealth from the better-off to those on benefits.
New leader Jeremy Corbyn gave the first hint of the new direction yesterday when he warned of inheritance tax hikes.
And his deputy, Tom Watson, suggested a major spending spree, saying Labour was now ‘unashamedly anti-austerity’.
In a chaotic opening day at the Brighton conference:
Mr Corbyn alarmed moderates by saying he would welcome communists, Trotskyites and Militant Tendency supporters into the party;
Mr McDonnell was found to have been urging militants to
publicly confront Tory MPs and journalists who criticise Labour;
Unions and senior Labour figures wrecked Mr Corbyn’s attempt to impose a policy of unilateral nuclear disarmament;
Mr Corbyn called for pupils to be taught about the right to strike and other aspects of the nation’s ‘incredible socialist tradition’;
Chancellor George Osborne warned of a £218billion black hole in Labour’s spending plans – £12,000 for every working family;
Mr Corbyn faced further criticism over his sympathy for the IRA as he confirmed he supports a united Ireland.
The Labour leader’s humiliating setback over Britain’s nuclear deterrent came yesterday when he tried but failed to force a conference debate on the issue.
‘This was the first attempt to stamp his authority on the party and it blew up spectacularly in his face,’ said one shadow minister.
‘We are now in a position where the leader will have to vote against Labour policy.’
The party’s stance on Trident is now in disarray, with MPs likely to be given a free vote in the Commons next year to avoid the embarrassment of Mr Corbyn, a senior member of CND, voting against his party.
Rows over policy are expected to dominate this week’s conference, with members of the Shadow Cabinet openly defying t he new leader.
Senior MPs were yesterday issued with a briefing note advising them to explain away rows and divisions as part of Mr Corbyn’s ‘new politics’.
All eyes will be on Mr McDonnell t oday as he sketches out the economic direction Labour will take.
The Shadow Chancellor will try to reassure moderates by paying lip service to the need to tackle the huge budget deficit left behind by the last Labour government.
But he will press ahead with controversial plans to print tens of billions of pounds of new money to fund a spending spree.
And he will announce a policy review to look at plans for a massive hike in National Insurance contributions for the better-off, higher taxes on business and a new ‘ Robin Hood tax’ on the banks, which critics warn will damage the City.
In a further blow to the middle- classes Mr Corbyn also signalled his intention to raise inheritance tax by intro- ducing a graded system. He said David Cameron’s promise to limit the tax to homes worth more than £1million had given the richest households ‘a huge tax break’.
Asked if he would reverse the popular tax cut if he won office, Mr Corbyn said: ‘Well, it should be graded actually.
‘Somebody leaving a normal house to their children or family, fine. But when you cut overall the rate of inheritance tax, that means the very richest become richer.’
In his Budget this year, Mr Osborne ended the 40 per cent inheritance tax on family homes worth up to £1million – a rise from the current threshold of £650,000. Millions of families will be able to avoid the tax altogether from next year when passing on their homes to children or grandchildren, with only 6 per cent of families having to pay it.
Labour was unable to supply any details of how its new policy would work. But Mr Corbyn’s comments suggest any relief felt by ordinary families will be short-lived if his party seizes power.
Mr McDonnell’s conference speech today will signal plans for a huge tax raid on middleclass families as he calls for a radical redistribution of wealth in Britain. He will use the conference to call for a ‘ new economics’ i n which wealth is ‘shared more equally’ among all of the country.
Mr McDonnell will also confirm plans to order the Bank of England to print tens of billions of pounds of new money to fund a spending spree if Labour is elected.
This comes despite a warning from Adair Turner, exhead of the Financial Services Authority, that this represents a ‘huge risk’ to the economy.
The Shadow Chancellor has already called for a 7p rise in National Insurance contribu- tions for those earning more than £50,000 a year.
Yesterday, he appointed a team of Left-wing economists to advise him on policy, including French author Thomas Piketty, who backs an 80 per cent top tax rate.
Mr Corbyn said Labour would move in this direction by reintroducing the 50p top tax rate, and the party would raise corporation tax and axe the welfare cap that limits the benefits families receive.
While the Shadow Chancellor will talk of the need to tackle the deficit left behind by the last Labour government, his plans will leave him free to go on an unfunded spending spree running into tens of billions of pounds a year.
Mr Osborne warned that Labour’s plans would create a £218billion black hole, potentially leading to punishing tax rises for the middle classes.
The Chancellor said: ‘The Labour Party’s plans to nationalise great swathes of our economy and abolish the welfare cap would cost billions, and now we know the money they say they would raise simply doesn’t exist.
‘That means they would carry on borrowing, risking higher mortgage rates and burdening our children with more debt than they could ever hope to repay.’
‘Plans would cost billions’
FROM the conference stage in Brighton, Jeremy Corbyn was hailed yesterday as the man ‘ shaking up’ Britain’s ‘stale political culture’.
In reality, however, there was nothing vaguely new about the clapped out, failed socialist agenda espoused by the Labour leader and his cabal of fixers, aides and political henchmen.
Harking back to the battles of the 1980s, he spoke of scrapping the Trident nuclear deterrent – ‘ a weapon of mass destruction’ – and hiking taxes for businesses and the ‘rich’.
He also admitted that he had wanted the IRA – which, at the Tory conference 31 years ago, brought murder to the very resort he was standing in – to win and that he had viewed the British as being the ‘other side’.
Meanwhile, there was a refusal to condemn his close ally John McDonnell (who has also praised the IRA) for comments he made during the last Parliament calling for an ‘insurrection’ to ‘bring down’ the Government. This is the same Mr McDonnell, we learned yesterday, who praised rioters who ‘kicked the s***’ out of Tory Party headquarters in 2011 and complained about the jail term given to a young thug who – with potentially lethal consequences – hurled a fire extinguisher at the police from the top of the building.
Today, incredibly, this hard Left bully boy – who said he wanted Tory MPs to face ‘direct action’ everywhere they went – will take the stage as Shadow Chancellor in Her Majesty’s official opposition!
Doubtless, Team Corbyn – which hates media scrutiny – will complain about the spotlight again falling on past remarks, rather than their ‘fresh’ policy vision for the future.
But what could be more backward looking than Mr Corbyn saying he would increase inheritance tax and reinstate the 50p tax rate? The leading names on his Economic Advisory Committee, also unveiled yesterday, are a French author who wants the top rate of tax to be 80p and the Leftwing ex-Bank of England adviser Danny Blanchflower, who predicted that Tory spending cuts would spark mass unemployment. In fact, 1,000 jobs were created
every day. At one stage, Mr Corbyn was asked yesterday if ‘Trotskyists and Communists’ would be welcome in the Labour Party.
His answer – Yes – spoke volumes about his own ‘stale political culture’.