Labour manifesto: Income tax to increase for earners over £80,000

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An extra £6.4bn would be raised from income tax under plans in Labour’s general election manifesto.

The rate would increase to 45p for people earning over £80,000, and 50p those on more than £123,000, “to help fund our public services”.

Labour said the total extra tax take – which also includes corporation tax rises and a crackdown on tax avoidance – would be £48.6bn.

Jeremy Corbyn said the manifesto was a “programme of hope”.

Other measures include an “excessive pay levy” on salaries above £330,000, more free childcare and the nationalisation of England’s 10 water companies.

The Tories said the sums “don’t add up”.

“Whatever your age or situation, people are under pressure, struggling to make ends meet,” Mr Corbyn said as he launched the proposals in Bradford.

“Our manifesto is for you.”

Labour is the first of the major parties to publish its manifesto ahead of the general election on 8 June.

Mr Corbyn joked about last week’s leak of a draft of the proposals as he said Labour would not increase VAT or National Insurance, with income tax rises reserved for the “richest 5% of high earners”.

The manifesto also includes:

  • Taking Britain’s railways back into public ownership
  • Moving to publicly owned, decentralised energy system
  • Scrapping university tuition fees
  • Building 100,000 affordable homes a year
  • Supporting the renewal of the Trident nuclear weapons system.

Mr Corbyn said he was confident that once voters could “study the issues” they would conclude: “That the few have prevailed over the many for too long.

“And that they will decide it is now time for Labour.”

‘Distinctive choice’

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By political correspondent Iain Watson

Don’t be distracted too much by the detail. Labour’s manifesto will have policies on everything from preserving the bee population to the provision of wifi on public transport.

And don’t be mesmerised by what’s known in political circles as “retail offers” – price caps and fare freezes.

Taken together, Labour’s prospectus offers the most distinctive choice for voters in a generation. At its core are three interlinked arguments: first that austerity holds back – rather than helps – economic growth, so Labour would borrow billions for investment.

Second, that the better off – not necessarily the fabulously wealthy – along with many businesses should pay more in tax to meet the day to day cost of providing public services.

And third, that more regulation – and in some cases re-nationalisation – would ensure businesses operated in the interests both of consumers and the wider economy.

Those close to Jeremy Corbyn believe this programme places Labour not on the far left of politics but in the mainstream of northern European social democratic thinking. Now there will be a bit of political cross-dressing in this campaign, with the Conservatives under Theresa May showing a bit more enthusiasm for limited state intervention.

But the Labour manifesto will break with what’s often known as the Anglo-Saxon economic model of lower taxation and flexible labour markets and in doing so, the party is distancing itself not just from the Conservatives but from its New Labour predecessor too.

The water industry, which was sold off in 1989 by the government of Margaret Thatcher, would be taken into public ownership either by simply buying the shares of the existing companies or by a compulsory measure whereby companies would have to be given government bonds in exchange for the shares.

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The manifesto promises an increase in subsidised childcare

There will also be a commitment in the manifesto to provide 30 hours of free childcare for all two to four-year-olds, covering 1.3 million children.

Labour has already made a series of tax pledges, including increasing corporation tax by 19% to 26%, a “Robin Hood” tax on financial transactions and asking the top 5% of earners to pay more, to fund multi-billion pound spending commitments on health, education and policing.

The manifesto will also include a pay levy designed to discourage companies from paying “excessive” salaries.

Companies paying staff more than £330,000 will pay a 2.5% surcharge while salaries above £500,000 will be charged at 5%. Labour has said the move, designed to reduce pay inequality by bearing down on “very high pay”, will only apply to firms with “high numbers of staff”.

The Conservatives said taxpayers would have to foot the bill for Labour’s unfunded spending commitments.

“Jeremy Corbyn’s economic ideas are nonsensical,” said Treasury minister David Gauke.

“It is clear that Labour would have to raise taxes dramatically because his sums don’t add up.”

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