politics

Labour set to oppose any immediate corporation tax rise in next week’s Budget


Labour looks set to oppose any immediate corporation tax rise in next week’s Budget in a major shift since Jeremy Corbyn ’s leadership.

Before Covid struck, Labour pledged in 2019 to reverse the bulk of Tory corporation tax cuts for large firms to fund the party’s radical agenda.

But with businesses hit by lockdown, Keir Starmer said at PMQs today: “Now is not the time for tax rises for families and for businesses.”

Asked later if Mr Starmer’s pledge meant opposing all tax rises, even on businesses, Labour MP James Murray said: “This is not the time to do tax rises, in the middle of an economic crisis.”

Asked if he would not support “any tax rises at all” in the Budget next week, the Shadow Financial Secretary to the Treasury told the BBC’s Politics Live: “In the Budget next week we don’t want to see tax rises, this is not the time to do that.”



The Chancellor is said to be considering a hike in corporation tax

And asked if that could mean Labour votes against a Tory corporation tax rise, or a windfall tax on firms that have done well in the pandemic, Mr Murray said: “Let’s see what the government put out in the Budget next week rather than talking about hypotheticals.”

He added: “What the government should be focusing on now is investment in growth and trying to get the economy back on its feet.

“If you have a country where businesses are closing, where people don’t have money to spend in the economy, and you haven’t got investment going into public services and infrastructure, that is no way to get the economy back on its feet.”

A Labour source later clarified the party did not oppose the idea of corporation tax rises in general – but did oppose an immediate rise while Britain is in thick of the pandemic.

The source added: “Let’s look at what the Chancellor brings forward.

“If he’s talking about corporation tax going up gradually across the parliament to an OECD average, that’s one thing.



Rishi Sunak will set out the Budget on March 3

“But we don’t think there should be tax rises right now where the focus should be supporting business investment and growth.”

It comes after the Times reported Chancellor Rishi Sunak is looking at raising corporation tax to between 23% and 25% by 2024.

The main rate of corporation tax was slashed from 28% to 19% under a decade of Tory rule.

In the 2019 election Labour pledged to reverse most of these cuts and bring the rate back to 26%, except for small businesses with lower profits who would have paid much less.

Attacking Mr Starmer at PMQs, Boris Johnson claimed: “It is preposterous for him to talk about tax rises when he stood on a manifesto only a little over a year ago to put up taxes by the biggest amount in the history of this country.”

The Prime Minister also wrongly claimed he had cut council tax by 20% when he was London mayor.

The Greater London Authority’s council tax precept did fall by around 11% over his term, from £310 in 2008/09 to £276 in 2016/17. But that is only one small portion of council tax – the far larger part of the bill will have risen for most people.

At the time he was accused of “fundamental dishonesty” and “smoke and mirrors” over even this cut, because opponents said it included an Olympics bill that ended as planned in 2016.





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