More on the proposed tax rises
The FT’s chief political correspondent Jim Pickard writes:
The most striking thing about the Labour manifesto – and the accompanying “grey book” with costings – is that it features £82.9bn of tax rises and the equivalent extra annual spending, aside from an extra £400bn of capital borrowing.
That tax increases is markedly higher than the £48.6bn of extra annual tax and spending in the 2017 Corbyn manifesto.
The biggest revenue-raiser in the entire 105-page document is dealt with in only 18 words:
“We will end the unfairness that sees income from wealth taxed at lower rates than income from work.”
But it will raise an expected £14bn a year, according to Labour’s costing document. The balance sheet estimates revenue raising of £9bn a year from taxing capital gains at income tax rates and another £9bn from taxing dividends at income tax rates – but then substracts £4bn as a “reduction for uncertainty”.
Labour proposals would see major shake up of energy sector
More from the FT’s energy correspondent Nathalie Thomas on what Labour’s plans mean for the industry:
Labour is going after oil and gas companies in a big way.
Not only would they be subject to a windfall tax but the manifesto states that a Labour government would also change criteria for companies that are listed on the London stock exchange so that “any company that fails to contribute to tackling the climate and environmental emergency is delisted”.
It’s similarly bad news for energy infrastructure companies such as National Grid, as well as the biggest electricity and gas suppliers. Labour has stuck to previous pledges that it would re-nationalise energy networks — the pipes and wires that transport electricity and gas to homes and businesses.
It would also take back into public hands the supply arms of the “Big Six” energy companies, including British Gas.
There is a boost for the nuclear industry, however: Labour said it would build “new nuclear power needed for energy security”.
How will business react to Labour policies?
More from Jim Pickard who is in the room in Birmingham:
Jeremy Corbyn is insisting that his policies – free broadband, improved transport services, better infrastructure – will be welcomed by businesses which have been struggling to access capital and suffering from high business rates.
“We are absolutely on their side,” he said.
But companies will not be oblivious to the fact that the manifesto features a host of new taxes on the corporate world.
A Labour government would slash corporate tax reliefs, cut R&D funding, impose a new tax on multinationals, ramp up corporation tax and extend its financial transactions tax to raise even more money.
The Institute of Directors has said Labour’s approach on corporate governance is “frequently insightful but almost always one-sided.”
It’s absolutely right for Labour to seek improvement to how British businesses are run, and to look abroad for new policy ideas. But attempts to reform UK corporate governance must start from the recognition that our present system is an asset to the economy, and is admired and imitated throughout the world.
Corbyn: ‘Radical answers are what is necessary’
Jeremy Corbyn is now taking questions from journalists.
He defended the level of government spending outlined in the manifesto, and said that “radical answers are what is necessary” to fix the challenges facing the country.
On Brexit, the Labour leader was asked again whether he would back Leave or Remain in a second referendum, having failed to answer the question repeatedly during a televised debate earlier this week.
Mr Corbyn again did not directly answer, but instead said “my government would accept and carry out” the result of a second vote.
“Let’s get together on this, the British people have the final say, our government will carry it out, whatever the result of that vote is.”
The Labour leader also said he does not think his party’s policies would contravene EU state aid rules.
“So far as we are concerned this is all possible,” he said.
Tax experts look at Labour’s sums on oil tax idea
Tax experts are privately questioning how much Labour’s proposed windfall tax would raise, pointing out that in previous years higher tax regimes have generally led to lower investment and production, writes Nathalie Thomas in Edinburgh.
While oil and gas producers in UK waters enjoy a favourable combined tax rate of 40 per cent, experts said this has not always been the case. Until the oil price crash that started in 2014, some older, bigger oil and gas fields in UK waters were paying a combined tax rate of more than 80 per cent.
The combined tax rate today in Norway – one of the countries cited by Labour – is 78 per cent but various incentives reduce this in reality to the low seventies per cent.
Tax experts, who declined to be named as they have to remain politically neutral, added that in Norway oil and gas explorers enjoy very favourable treatment when they are looking for hydrocarbons. They receive 78 per cent of their exploration costs back in cash from the state if they don’t find oil or gas. This regime doesn’t exist in the UK.
“Norway is considered lower risk, lower reward,” one oil tax specialist said, adding that Norway is a poor comparison as it still has bigger, more profitable fields compared to the ageing UK North Sea.
The tax regime improved for UK North Sea companies in 2016 when the former chancellor George Osborne reduced to zero a petroleum revenue tax which was paid on top of other charges such as corporation tax and had previously been as high as 50 per cent.
Corbyn: Labour offers ‘most radical’ plan in decades
Jeremy Corbyn has finished his speech with a promise that this election offers a once-in-a-generation opportunity to transform Britain using a manifesto which is “the most radical and ambitious plan to transform our country in decades.”
Painting his party as being on the side of ordinary people – from NHS patients to students and the elderly – Mr Corbyn said his policies would “rewrite the rules of the economy” for the better.
The opposition party leader closed his speech with a quote from Chilean writer Pablo Neruda:
“You can cut all the flowers but you cannot keep Spring from coming.”
FT analysis: Spoof site shows Tories doubling down on digital strategy
As we flagged below, the Conservative party’s digital team has struck again, with a crafty website to attack the opposition.
Sebastian Payne gives his take:
Visit labourmanifesto.co.uk and you will find a Conservative-branded site that criticizes Labour’s policy platform for its stances on Brexit, taxation and further referendums. Unlike the row over factcheckUK, this clearly states it is a Conservative website – although it is branded in Labour party colours.
The Tories have also been buying up search results to try and make labourmanifesto.co.uk the top result when you search “labour”. It is appearing on some Google returns, but not always as Labour’s digital team are trying to fight back.
Party insiders are not concerned about another row. “Lean in and double down, it’s the Vote Leave way,” said one Tory official, a reference to the Brexit campaign during the 2016 referendum.
Tory MPs are also tweeting out this graphic, which follows similar themes to the labourmanifesto.co.uk website:
For more on the subject of the Tories’ digital campaign, check out this piece by Seb
Corbyn promises to stand up to the establishment
Jeremy Corbyn has promised a Labour government would stand up to the most powerful people in Britain including “bankers, billionaires and the establishment” who have benefited from a “rigged” system.
“I accept that the opposition and hostility of the rich and powerful is inevitable,” he told supporters at Birmingham City University.
“The billionaires and the super-rich, the tax dodgers, the bad bosses and the big polluters – they own the Conservative Party. But they don’t own us. They don’t own the Labour Party. The people own the Labour Party.”
Mr Corbyn promised “real change for the many not the few,” and a manifesto “full of popular policies that the political establishment has blocked for a generation.”
Party’s Brexit pledge is to give ‘the people’ final say
Labour’s Brexit pledge is to “put this decision in the hands of the people to give you the final say”, with a legally binding referendum, Jim Pickard in Birmingham writes.
Meanwhile the document has watered down the vote at party conference in September for unlimited freedom of movement for all migrants.
Instead it refers only to granting EU nationals (who are already in the UK) to continue living and working in the country.
Rather than any concrete regime for EU citizens wanting to come to the UK after Brexit, the manifesto offers only warm words about the benefits of freedom of movement:
Our public services and our industry have benefited from workers coming here.
Aberdeen-based companies dismayed by Labour’s oil tax plans
Oil and gas companies based in Aberdeen reacted with dismay to the Labour party’s plans for a windfall tax, warning that any increase in taxes would drive away investors who are needed to maximise the volume of hydrocarbons that can still be recovered from UK North Sea, writes Nathalie Thomas in Edinburgh.
Otherwise Britain would be left relying on imports of oil and gas from countries such as Saudi Arabia.
“Any increase in tax rates will drive investors away and damage the long-term competitiveness of the UK’s offshore oil and gas industry, threatening jobs and future tax revenues and needlessly damaging the UK economy,” said Gareth Wynn from OGUK, a trade organisation for North Sea companies.
Our industry is already in action to play its part in helping the UK achieve its net zero emissions target and is doing so alongside minimising our reliance on imported oil and gas. Meeting as much as possible of UK demand from our own sources avoids offshoring emissions to other countries and helps us maintain the industrial expertise we need for engineering a future net zero energy system here in the UK.
Conservatives create spoof Labour manifesto site
FT Alphaville’s Jemima Kelly writes:
A spoof website with the address “labourmanifesto.co.uk” has been set up by the Conservatives just days after the party was criticised for changing its Twitter account name to appear to be an independent fact-checking service.
The site states on its homepage that it is “a website by the Conservative party” and says it is promoted by Alan Mabbutt, a senior member of the party. A link to the site was tweeted by the official Conservatives Twitter feed about 25 minutes before the official launch of Labour’s manifesto.
A statement on the website reads:
All you need to know about Labour’s 2019 manifesto is that Jeremy Corbyn as Prime Minister means higher taxes for you and your family, the chaos of two more referendums and more indecision and delay on Brexit.
The site was the top search result for “Labour manifesto” on Google just before Labour’s manifesto launch, but a few minutes later was not to be found on Google’s search results.
Earlier on Thursday Google said it would stop advertisers from being able to target election adverts using data like political affiliation and public voter records.
Labour would increase taxes by £83bn a year
Jeremy Corbyn is on stage to a rapturous welcome.
He is holding a copy of the party’s manifesto, which is titled “It’s time for real change”.
Jim Pickard has some more details on what it contains:
A Labour government would increase taxes by £82.9bn a year with the vast majority falling on big business and the wealthy, according to the party’s manifesto.
The document sets out plans to raise £14bn a year from changes to capital gains tax, so that gains are taxed at the same level as income tax.
The party’s manifesto also includes – as well as a leap in corporation tax from 19p to 26p – a new way of taxing multinational corporations to raise £5.8bn a year. Under the new approach, corporate groups under common ownership will be treated as “unitary enterprise” so that profits are declared where economic activity occurs and where value is create.
The financial transactions tax would be extended in order to raise £8.8bn a year, while another £5bn would be raised by reversing recent cuts to inheritance tax, imposing VAT on private school fees, scrapping the Married Persons Allowance and introducing a second homes tax.
Mr Corbyn’s biggest surprise giveaway is the announcement of an extra £10.8bn a year for social care. The party promises that no one should ever have to pay “catastrophic” costs of more than £100,000 for the care they need in old age, with a lifetime cap on personal contributions to care cost.
Labour launch event underway
Rebecca Long-Bailey, shadow business secretary, is on stage in Birmingham warming up for Jeremy Corbyn. She is seen as a potential successor to the Labour party leader when he steps down.
How will the oil tax play in Scotland?
The FT’s Sebastian Payne is wondering how Scottish Labour party leader Richard Leonard will be feeling about the oil and gas tax the UK party leadership has unveiled.
Labour used to be able to take scores of Scottish seats almost for granted, and has built its only majorities in history on a strong showing in Scotland’s 50+ constituencies.
But support for the party has collapsed north of the border, squeezed by both the Scottish nationalists and the Conservative party which has picked up unionist votes.
Oil and gas groups in Labour’s sights with £11bn windfall tax proposal
Jim Pickard reports from Birmingham:
Labour wants to raid UK-based oil and gas companies that have extracted oil and gas from the North Sea because it believes the UK has collected less tax per barrel than other countries such as Norway and the Netherlands.
“Had the UK charged the same effective tax rate as the average rate charged by North Sea countries from 1992 to the present day, it would have collected an additional £117bn in taxes,” a Labour official said.
The precise mechanics of the tax have not yet been worked out and would be the subject of a consultation.
“The big oil and gas corporations that profit from heating up our planet will shoulder the burden and pay their fair share,” Mr Corbyn was expected to say in his manifesto launch speech.
Labour estimated that UK continental shelf oil companies made a net operating surplus of £273bn between 1997 and 2018.
Labour claims the tax should have no effect on prices for consumers at the pump because oil prices are determined by the global oil market.
But trade unions have been fighting a rearguard action against the idea of the tax since it was discussed at Labour’s manifesto meeting last Saturday because they are concerned about its impact on the industry.
Corbyn launches most leftwing Labour manifesto in decades
Labour leader Jeremy Corbyn has unveiled the party’s most left-wing election manifesto in decades including a windfall tax on oil and gas companies that could raise more than £11bn, reports Jim Pickard in Birmingham.
The oil levy will be used to pay for what Labour described as a “just transition fund”, providing an £11bn support package to help retrain 37,000 workers in the industry to “make the transition to a clean economy”.
Labour’s 2019 manifesto — launched in Birmingham this morning — promises some radical policies if the party is elected, including a number of nationalisations, higher taxes on big business, huge borrowing for capital investment and extra money for the National Health Service, social care and schools.
Corbyn arrives for manifesto launch
The Labour leader and his key lieutenants have arrived at Birmingham City University for the manifesto launch, which is set to kick off in the next 15 minutes.
Watch this space for details on Labour’s pledges to the electorate as we get them.
What to expect from Labour
The opposition party has slowly revealed some of its economic policies as the election campaign has gone on. All will be revealed at 11am, but here are some of the pledges we already know about:
• In the most high-profile policy announcement by any party so far, Labour has said it would nationalise BT’s Openreach network and provide free full-fibre broadband to every home and business in the UK
• We reported overnight that Labour has drawn up plans for a windfall tax on the oil industry as part of its attempt to shift the UK towards a low-carbon, green economy.
• On housing, Jeremy Corbyn will vow to spend £75bn on the biggest social housebuilding programme since the 1960s, setting a target of delivering 150,000 new government-supported homes a year by the end of the next parliament.
• The manifesto will also include plans to force companies to hand 10 per cent of their shares to workers over 10 years despite a business backlash.
Alex Salmond indicted for attempted rape and sexual assault
Mure Dickie reports:
Alex Salmond, former first minister of Scotland and one of the most important figures in modern Scottish politics, has been formally indicted on 14 charges of attempted rape and sexual assault.
The indictment prepared by prosecutors ahead of a preliminary hearing on Thursday in the case against case against Mr Salmond includes accusations of assault against 10 women at multiple locations around Scotland between 2008 and 2014.
It contains the first official confirmation of details of the accusations against Mr Salmond, who stepped down as first minister and leader of the Scottish National party after the 2014 independence referendum and in 2017 lost his Westminster seat.
A lawyer for Mr Salmond said on Thursday that the former first minister would plead not guilty. After an initial hearing on the case in January, Mr Salmond said he rejected “absolutely” the charges against him. “I am innocent of any criminality whatsoever,” he said.
Public sector borrowing at 5-year high in October
Valentina Romei reports:
Public sector net borrowing rose to the highest level in five years in October, adding to the pressures on the government’s finances as the main political parties pledge to increase public spending if they win next month’s election.
Public sector net borrowing, excluding public sector banks, increased to £11.2bn in October. This was higher than the £9.3bn expected by economists polled by Reuters and £2.3bn more than in the same month last year, according to data from the Office for National Statistics. This is the highest borrowing for October in five years.
In the fiscal year so far — April to October — borrowing rose to £46.3bn, £4.3bn more than in the same period last year, corresponding to a 10 per cent rise.
The extra borrowing adds pressure to the UK’s public finances at a time when the main political parties have pledged to increase public spending as they vie for support ahead of the December 12 poll.
Government spending is set to rise higher under proposals set out by both the Conservative and Labour parties.
Markets round-up: European equities fall at the open
European stocks have continued this week’s miserable run this morning, with the composite Stoxx 600 down 0.7 per cent shortly after the open.
London’s benchmark FTSE 100 felt the pinch from a tumble in Royal Mail’s share price, with the bourse falling 0.8 per cent in early trading.
The UK postal operator was the biggest loser among major European stocks, shedding about 17 per cent this morning and setting itself up for its worst daily performance since October last year.
Sterling rose 0.1 per cent against the dollar to $1.2939.
Labour’s front bench head for Birmingham
Labour’s heavy hitters are Birmingham-bound this morning, with the manifesto launch expected around 11am.
Keir Starmer, the shadow Brexit secretary, said as he left Euston station that the policies unveiled today would offer people the “dignity and decency” they were demanding.
Meanwhile, Angela Raynor, the shadow education secretary has been braving the cold doing the media rounds, insisting Labour’s ambitious policy pledges are “absolutely deliverable” within the lifetime of the next parliament.
Shadow chancellor Diane Abbot has also headed for the midlands, promising more key policy revelations at the launch.
FT poll tracker
As Labour’s front bench limber up for this morning’s manifesto launch, they will be hoping their ambitious campaign pledges will go some way towards closing the current polling gap.
At 29 per cent, Labour currently lags 13 points behind the Conservatives, according to the FT’s latest poll of polls, updated this morning. At 42 per cent, the Tories retain a solid lead over the opposition party, with the margin unchanged from yesterday.
Tory national insurance pledge will ‘not necessarily’ be met in next parliament
Boris Johnson’s plan to raise the national insurance payment threshold to £12,500 is an “ambition” that will “not necessarily” be reached by the end of the next parliament, according to Sajid Javid.
The Conservatives would, if re-elected, raise the threshold for workers to start paying national insurance contributions from the current earnings level of £8,632 to £9,500 next year, the chancellor said on Sky News.
“The ambition is to take then the threshold to £12,500, to try and keep raising it when we can afford it,” Mr Javid said. “This is the prudent and sensible way to do it.”
His comments come after Mr Johnson, the prime minister, let slip the policy pledge to raise the threshold in comments made while on the campaign trail in the north-east yesterday. Mr Javid’s comments appeared to play down the immediacy of any such rise, however.
We want to do it of course as soon as we can. But at each budget we will make that decision depending on the growth forecast provided and what other priorities we have.
Labour in focus ahead of Birmingham manifesto launch
The big event of the day will be the Labour party’s manifesto launch, set to take place in Birmingham this morning.
Jeremy Corbyn will be looking to take hold of the campaign narrative as he sets out plans for £400bn of extra borrowing and an increase in taxes on big business and high earners to pay for a rise in public spending.
Housing will be a key centrepiece of the event, with Mr Corbyn vowing to spend £75bn on the biggest social housebuilding programme since the 1960s and setting a target of delivering 150,000 new government-supported homes a year by the end of the next parliament.
Also likely to feature is a windfall tax on the oil industry as part of the party’s attempt to shift the UK towards a low-carbon, green economy — a move that will anger union officials worried about jobs in the North Sea.
In the papers
Labour might be looking to grab the headlines today, but the party will need to dislodge Prince Andrew, who again dominates the front pages. The election, meanwhile, is largely absent.
After a brief period of respite the Duke of York is back in focus after he announced he was withdrawing from public duties amid the fallout from his connection to the Jeffrey Epstein scandal. Almost every major British paper — tabloid and broadsheet alike — leads on that news.
At the Financial Times, we have run with the Trump impeachment inquiry, after the US ambassador to the EU, Gordon Sondland, testified that he was following the president’s orders when he put pressure Ukraine to announce a politically motivated investigation.
We are off again.
Yesterday the Liberal Democrats were in the spotlight as they launched their election manifesto in north London. Today it is the turn of the Labour party.
Jeremy Corbyn will look to kickstart the party’s campaign in earnest with sweeping pledges on housing, climate and nationalisation as he makes his pitch to voters.