Mcdonnell budgeting for Labour to be in power 15 years
Shadow chancellor to raise tax on top 5 per cent, corporation tax and put levy on City transactions
LABOUR is planning for a 15-year stretch in government, with plans to spend £500billion in the first 10 years just the “first step”, John Mcdonnell said yesterday.
The shadow chancellor confirmed that the spending commitments outlined in Labour’s last general election manifesto were just the beginning of the party’s spending plans.
They would be funded by increasing taxes on the top 5 per cent of earners, rises in corporation tax, a tax on financial transactions in the City of London and tackling “industrial scale” tax avoidance and evasion.
He also claimed the measures were backed by the Confederation of British Industry (CBI).
However, Britain’s biggest lobby group distanced itself from Mr Mcdonnell’s plans last night.
In a day of media appearances, Mr Mcdonnell told a lunchtime briefing for reporters that he was “embarrassed about how mediocre” £500 billion spending plans – contained in Labour’s 2017 manifesto – were only “the first step to give people confidence”.
He said: “I am looking for three periods of office for a Labour government, so we will have to revisit these figures.”
He told union leaders in Manchester the £500 billion would be invested over 10 years in our road and rail, digital, research and development and alternative energy sources.
He set out plans to give new rights to freelance workers, establish a new Department for Employment, stop funding infrastructure using PFI deals, and privatise rail and water companies as well as Royal Mail.
Half of the £500 billion would be channelled through government departments and the remainder through a new national investment bank.
The sum was “supported by the CBI, which again we are working alongside to develop our proposals”, he said.
However, this was immediately disputed by Britain’s biggest business lobby group.
A CBI spokesman: “The CBI backs investment in infrastructure to help drive up UK productivity, but this must be done within the constraints of sustainable public finances. It’s not clear that Labour’s proposals meet this test.”
Chris Leslie, the former Labour shadow chancellor, has warned that the spending plans would require an “awful lot of either borrowing or extra taxation”.
“In order to raise it you’d have to double income tax. You’d have to double National Insurance. You’d have to double council tax. And you’d have to double VAT as well.”
But speaking after his speech to the TUC conference, Mr Mcdonnell denied that middle-class taxpayers – such as Daily Telegraph readers – would be unfairly targeted, saying the top 5 per cent of earners would be paying “a bit more, not a lot more” in tax.
He told The Telegraph: “All we are getting back from your readers is the feeling that the social fabric of society is crumbling after eight years of austerity and people have had enough.”
He also pledged to join railway workers on the picket line if they launch
‘If there’s ballots for industrial action and the management isn’t responding accordingly, I’ll be on the picket lines with the workers themselves’
winter strikes and urged company leaders to “wake up” to the depth of anger felt by staff.
Pressed on whether a “winter of discontent” could be looming on the railways, Mr Mcdonnell said: “We will see what industrial action takes place.
“I’m hoping there will be negotiated settlements. But don’t underestimate the depth of anger among railway workers at the moment.
“And, if there’s ballots for industrial action and the management isn’t responding accordingly, I’ll be on the picket lines with the workers themselves.
“I think management of these individual companies now need to start waking up about just how, again, most people who are working on the railways, what’s happened with their standard of living, and how they feel as though their professionalism is being undermined.”
The trade union movement is celebrating 150 years since the first congress took place at the Manchester Mechanics’ Institute in 1868.