Labour opposes rise in corporation tax in Autumn Budget

Starmer's spokesman says it's the wrong time to be talking about tax rises - but the move is likely to anger left-wing activists.

Keir Starmer’s spokesman has rejected mooted Tory plans for a rise in fuel duty, corporation tax and capital gains tax in the budget.

The Labour leader’s spokesman told lobby journalists this afternoon that it is “absolutely the wrong time to be talking about tax rises”.

The comments come as newspapers report that “Treasury officials are drawing up plans for a £30bn tax raid on the wealthy, businesses, pensions and foreign aid — to plug a hole in the nation’s finances caused by the coronavirus crisis.”

The Times reports that Rishi Sunak, the chancellor, is considering a proposal to increase corporation tax from 19% to 24% in the November budget, a move that would raise £12bn next year, alongside a hike capital gains tax.

Other papers noted that the 10-year freeze on fuel duty – which climate campaigners say is a catastrophe for the environment – could also be finally increasing. But No 10 sources have scrambled to deny the claims. As Politico reported today: “The policy does not appear to have survived 24 hours after appearing on the front page of Tuesday’s Sun“.

Labour backed a rise in corporation tax in its 2019 manifesto. as did Keir Starmer during his leadership campaign. Starmer also backed a Green New Deal in his campaign.

However, speaking to journalists, Starmer’s spokesman said the government should not be “floating ideas for new tax rises” amid an economic crisis.

Some activists have reacted with anger. Labour for a Green New Deal responded: “This stance is a betrayal of Keir Starmer’s promises, Labour’s principles and of party members.”

Jonathan Bartley, co-leader of the Green Party of England & Wales, told LFF: “This is no time for business as usual but precisely the right time to create a green recovery rooted in equality.

“What is the point of Labour if it fails to advocate for fairness, let alone support the most basic measures to tackle the climate emergency? By rejecting the idea of fair taxes, Labour is missing the chance to help move us towards this more equal and sustainable society. With Extinction Rebellion on the streets of London it is clear that we need to see radical change, which starts with ensuring that fossil fuels are taxed properly.”

He added: “Increasing corporation tax to redistribute excess profits and raising fuel tax to promote other other forms of transport including walking and cycling make sense now and for the future.”

One left-winger commented online: “[This is] passing up a big opportunity to promote tax justice and address inequality. If you’re worried about tax increases hindering the recovery then just offset them with additional spending or tax breaks for those struggling.”

Writer Mic Wright wrote: “The Labour Party is dead. Rename the corpse The Managerial Party and have done with it.” Another added: “Ah, labour returning back to the tried and tested Lib Dem tactic of basically appealing to nobody at all.”

However, economics professor Malcolm Sawyer said: “Labour [is] right to say [it’s the] wrong time to talk about tax rises. Why deflate the economy? Better to argue raise capital gains tax and lower value added tax, keeping ‘tax take’ unchanged or lower.”

Josiah Mortimer is co-editor of Left Foot Forward.

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