Workers to lose a month’s wages in higher taxes to pay for Corbyn’s reckless spending plans
New research reveals that Labour’s reckless spending plans could hand an additional £2,400 bill to every taxpayer every year if Jeremy Corbyn becomes Prime Minister. This figure – the ‘Cost of Corbyn’ – is equivalent to an entire month’s pay for the average earner.
Jeremy Corbyn’s Labour would wrack up a spending bill of an extra £1.2 trillion over the next Parliament. This includes £546 billion of capital expenditure – which their Fiscal Rule would allow them to borrow for. The remaining resource spending of £651 billion would need to be funded through tax measures.
Analysis of Labour’s spending plans shows that there is a £374 billion black hole in their numbers – with only £277 billion of their £651 billion of resource spending covered by taxes under their current plans. Labour will have to put up taxes to cover the shortfall.
The taxes that Corbyn’s Labour are considering bringing in include:
· A homes tax. A Labour policy document called for a new ‘progressive property tax’, which would see the average household pay up to £375 more on property tax than under the current Council Tax system. This is expected to raise an additional £10.2 billion across England compared to the current Council Tax system.
· A movers’ tax. A Labour Party policy document states: ‘Applying a capital gains tax to main residences too would allow us to limit the wealth inequality arising from the housing boom’. Scrapping the Capital Gains Tax exemption on main homes would force owners to pay income tax on the profits when they move home – and lead to a ‘double whammy’ levy on their estates when the owners die. Such a tax could raise £28 billion a year.
· A gifts tax. This would mean a huge tax hike for most people who inherit the family home their parents. Labour’s proposal is for a new ‘lifetime gifts tax’ on cash or homes given to individuals during the course of their lives. This is expected to raise an additional £9.2 billion a year.
· Fuel duty hikes and increased holiday taxes. Shadow Transport Secretary Andy McDonald has said: ‘Fuel duty, frozen since 2010 … Air passenger duty in aviation, broadly frozen over a similar period … This is not a sensible approach to transport policy’. Increasing fuel duty is expected to raise up to £855 million a year; raising Air Passenger Duty could raise £300 million a year.
Commenting, Chancellor of the Exchequer Sajid Javid said:
“Jeremy Corbyn is planning a reckless spending spree which we will all have to pay for. He will open up a huge black hole in the nation’s finances and hard working people will be the ones that suffer. In order to pay for his policies, he will not only have to massively increase borrowing and debt, he will also need to hike up taxes by £2,400 per person – this is equivalent to an entire month’s pay for the average earner.
“The British people have made huge progress over the last decade in repairing the damage left to us by the last Labour Government. If Jeremy Corbyn gets into power he would throw all that hard work away.
“A vote for Corbyn’s Labour is a vote for higher taxes and the chaos of two more referendums. Only a sensible, majority Conservative Government will get Brexit done and provide the economic certainty that families and businesses need to plan for the future. We simply cannot afford the cost of Corbyn.”