Labour’s one tax rise to pay for 12 policies
‘A taste of the economic chaos’
LABOUR was criticised last night after setting aside the same tax rise to pay for 12 separate policies.
The party insisted it will fund its latest pledge of NHS pay increases by raising corporation tax, paid by businesses.
But Conservatives pointed out that the same tax increase has been earmarked for at least 11 other spending priorities since Jeremy Corbyn became leader.
Financial experts said Labour’s plan to lift the 1 per cent cap on salary rises for NHS staff would cost billions of pounds, because every 1 per cent increase costs the taxpayer £500million a year.
John Ashworth, Labour’s health spokesman, said the policy would be affordable because corporation tax, which has been cut to 19 per cent from 28 per cent under the Tories, would be used to cover the costs.
But Labour has already said it would use corporation tax reforms to fund policies including help for the steel industry, reforms of maintenance grants, scrapping university tuition fees and boosts to pensions, social care and the schools budget.
Bob Neill, Tory MP for Bromley and Chislehurst, said: ‘This is just a taste of the economic chaos and jobs that would be lost if the weak, failing, nonsensical Jeremy Corbyn ended up in Downing Street.’
Mr Ashworth said the pay rise would give a boost to NHS staff who were ‘undervalued, overworked and underpaid’ by the Conservative government.
He also said Labour would legislate to require NHS trusts to consider patient safety when setting staffing levels, as ‘Tory mismanagement’ had left the health service ‘dangerously understaffed’. ‘I would want NHS staff to get a rise which takes account of the cost of living,’ he told BBC Radio 4’s Today.
‘We believe some of the big cuts in corporation tax, some of the big giveaways to very big corporations that have gone on under the Conservative government … do not need to go ahead. We are asking those with the broadest shoulders to contribute more.’
Wage increases to take account of inflation, which has reached 2.3 per cent but is predicted by some to hit 3 per cent, would costs billions of pounds.
Mr Ashworth insisted the plans were credible despite Labour having highlighted corporation tax as funding before.
‘The whole programme that the Labour Party will be putting to the country in this election campaign will be costed,’ he said.
Paul Johnson, of the Institute for Fiscal Studies, told Today: ‘Each 1 per cent on pay, just 1 per cent, costs half a billion pounds each time. If you are going to do that over the next two or three years you will also clearly need to raise significant extra sums in tax revenue.’
The Centre for Policy Studies has said Labour would have to put corporation tax back up to 28 per cent if it is to meet all its policies.
Health Secretary Jeremy Hunt said told ITV’s Good Morning Britain: ‘I would certainly agree NHS staff do a brilliant job and we would certainly like to pay them more than we are able to at the moment but we have had to face a very difficult period financially.’
Asked whether he had accepted an rise in his salary as an MP, he said: ‘Ministers have actually given themselves a pay cut – that’s the only pay we have control over. I have accepted my pay rise as an MP and my pay cut as a minister … all ministers have done because we recognise we have to set an example.’
Unison general secretary Dave Prentis said NHS staff were ‘struggling to get by’ on below-inflation pay rises and lifting the 1 per cent cap would make them feel valued.