LABOUR ROCKED: 'It doesn't add up!' Financial expert RIPS John McDonnell's budget APART

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• published: 07 Jun 2017
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LABOUR was today rocked by an eve-of-election attack on its budget blueprint as an expert warned the plan "doesn't add up". Paul Johnson, director of the respected Institute for fiscal Studies thinktank, said Labour's proposals contained "errors". And he said there was no way Labour could raise the nearly £50billion in extra tax its manifesto proposes simply from companies and the top five per cent earners, as leader Jeremy Corbyn and Shadow Chancellor John McDonnell insist they can. Responding to Mr Johnson's damning verdict, Conservative Chief Secretary to the Treasury David Gauke said: "Jeremy Corbyn is planning the biggest tax hikes the county will have ever seen which would put jobs at risk, the economy at risk and family finances at risk. "Corbyn is already planning to break his manifesto promise with a tax rise on married couples, but the black hole at the heart of his spending plans would mean further tax rises for ordinary working families. "In just 11 days' time the Brexit negotiations start but Corbyn's plan would crash the economy at home while he fails to secure a good deal abroad. "Only a vote for Theresa May and her local candidate on Thursday will ensure we can keep taxes low, secure a good Brexit deal and protect our national security." Mr Johnson told BBC Radio 4's today programme: "The Labour Party's looking at spending an extra £75billion a year according to their manifesto - and that is an extremely big number indeed. "That would be the highest tax levels in peace time in this country." Labour proposed to borrow £25billion for infrastructure spending, but the rest by raising taxes on companies and the "very rich". Mr Johnson noted: "If they were able to do that that would take tax in the UK to its highest ever level in peacetime, so this would be by UK standards quite extraordinary - though not so different from where we are in many other Western European countries. "But actually, they can't raise the £50billion they say they would raise ... just by taxing companies and a little bit off the rich. "It absolutely doesn't add up." Mr Johnson said part of the issue was that Labour's proposals included "errors". In particular some of their plans to tackle tax avoidance schemes "you just can't make work". In the "short run", Labour might be able to collect £30 or £40billion from raising the corporation tax rate and tweaking company tax perks. But those actions would probably reduce company investment, leading to falling tax revenue long term.

LABOUR ROCKED: 'It doesn't add up!' Financial expert RIPS John McDonnell's budget APART

• Report rights infringement
• published: 07 Jun 2017
• views: 975

LABOUR was today rocked by an eve-of-election attack on its budget blueprint as an expert warned the plan "doesn't add up". Paul Johnson, director of the respected Institute for fiscal Studies thinktank, said Labour's proposals contained "errors". And he said there was no way Labour could raise the nearly £50billion in extra tax its manifesto proposes simply from companies and the top five per cent earners, as leader Jeremy Corbyn and Shadow Chancellor John McDonnell insist they can. Responding to Mr Johnson's damning verdict, Conservative Chief Secretary to the Treasury David Gauke said: "Jeremy Corbyn is planning the biggest tax hikes the county will have ever seen which would put jobs at risk, the economy at risk and family finances at risk. "Corbyn is already planning to break his manifesto promise with a tax rise on married couples, but the black hole at the heart of his spending plans would mean further tax rises for ordinary working families. "In just 11 days' time the Brexit negotiations start but Corbyn's plan would crash the economy at home while he fails to secure a good deal abroad. "Only a vote for Theresa May and her local candidate on Thursday will ensure we can keep taxes low, secure a good Brexit deal and protect our national security." Mr Johnson told BBC Radio 4's today programme: "The Labour Party's looking at spending an extra £75billion a year according to their manifesto - and that is an extremely big number indeed. "That would be the highest tax levels in peace time in this country." Labour proposed to borrow £25billion for infrastructure spending, but the rest by raising taxes on companies and the "very rich". Mr Johnson noted: "If they were able to do that that would take tax in the UK to its highest ever level in peacetime, so this would be by UK standards quite extraordinary - though not so different from where we are in many other Western European countries. "But actually, they can't raise the £50billion they say they would raise ... just by taxing companies and a little bit off the rich. "It absolutely doesn't add up." Mr Johnson said part of the issue was that Labour's proposals included "errors". In particular some of their plans to tackle tax avoidance schemes "you just can't make work". In the "short run", Labour might be able to collect £30 or £40billion from raising the corporation tax rate and tweaking company tax perks. But those actions would probably reduce company investment, leading to falling tax revenue long term.