CORBYN’S CLASS WARRIOR
How Marxist shadow chancellor will target booming businesses and buy-to-let landlords
SHADOW chancellor John McDonnell yesterday threatened ‘aggressive’ raids on business and the middle classes, as he set out a full-blooded socialist agenda for Britain’s economy.
Buy-to-let property owners, businesses and the better- off were all put on notice that they will be targeted for swingeing tax rises by a future Labour administration.
Mr McDonnell, whose appointment provoked dismay among Labour MPs, said he would scrap tax breaks for buy-to-let investors, reverse popular cuts to inheritance tax and consider the introduction of a new 60p top rate of tax.
‘Labour’s plan to balance the books will be aggressive,’ he said.
The hard-liner, who describes himself as an ‘old-fashioned Marxist’, warned that Labour would rip up decades of political consensus on the conditions needed for a successful economy – and experiment with a ‘ radical departure … from the way past administrations tried to run the economy’.
‘We are embarking on the immense task of changing the economic discourse in this country,’ he added and claimed Karl Marx has ‘come back into fashion’. The Das Kapital author was one of the ‘definitive analysts’ of how the capitalist system works, Mr McDonnell said.
Buy-to-let property owners would be among the hardest hit by a Labour government, with Mr McDonnell vowing to scrap tax breaks which the party said were worth about £13billion – threatening to wreck the investments of millions.
He said there would be ‘ cuts to the billionpound tax breaks given to buy-to-let landlords for repairing their properties, whether they undertake the repairs or not’.
In a further blow to the sector, the shadow chancellor said Labour would impose 1970sstyle rent controls, despite widespread evidence from around the world that this will reduce the availability and quality of rented housing.
Mr McDonnell also gave a broad hint of tax rises to come for the better-off, saying Labour would impose ‘fairer, more progressive taxation’ to raise money. His plans also include reversing the Government’s pledge to restrict inheritance tax to millionaires.
Few details of his tax plans were given in the conference speech in Brighton. But earlier, Mr McDonnell refused to rule out raising the top rate of tax to 60p, saying it would be ‘part of the debate’.
He confirmed the appointment of a panel of Left-wing economic advisers, including French economist Thomas Piketty, who advocates an 80p top rate of tax.
Mr McDonnell is also consulting on plans for a punishing 7p rise in national insurance payments for those earning more than £50,000 a year.
On business, Mr McDonnell vowed to impose a controversial ‘Robin Hood tax’ – a levy on financial transactions – despite warnings it will cost jobs.
Corporation tax rates would be raised and firms would be forced to pay a ‘real living wage’ of £10 an hour. Labour would repeal antistrike laws and force businesses to put trade unionists on their boards to ‘ ensure workers are involved in determining the future of their companies’.
Mr McDonnell said Labour was now an avowedly anti-austerity party, which would oppose all spending cuts. ‘Austerity is not an economic necessity, it’s a political choice,’ he said. ‘The leadership of the Conservative Party made a conscious decision six years ago that the very richest would be protected and it wouldn’t be those who caused the economic crisis who would pay for it.’
The shadow chancellor paid lip service to the need to tackle the budget deficit left by the last Labour government. But he appeared to abandon a pledge, made just last week, that Labour would back Tory plans for a law forcing future governments to run a budget surplus in normal economic times.
The idea was ‘a political gimmick’, he said, adding: ‘We are not playing those games any more.’
The shadow chancellor received a rapturous welcome from Labour delegates and trade union militants. The biggest cheer came for a passionate pledge to ‘force people like Starbucks, Vodafone, Amazon and Google, and all the others to pay their fair share of tax’.
He said HM Revenue and Customs would be given more resources to chase down tax dodgers.
And he set himself on a collision course with Bank of England Governor Mark Carney, who has criticised Mr McDonnell’s proposal to print billions of pounds of new money to help pay for Labour’s plans.
The shadow chancellor said Mr Carney had ‘failed’ in his task of keeping inflation at 2 per cent. He said the Bank would be set a new, wider mandate to target higher wages and growth.
After facing criticism over his sympathy for the IRA and support for violent protest, the veteran MP yesterday insisted he supported only non-violent protest.
But he backed the activities of direct action groups, saying that ‘if politicians aren’t listening, we’ve always retained the right, over centuries, to get out in the streets and demonstrate’.
Comment – Page 16
‘Aggressive plan’