Labour's manifesto would increase tax burden to its highest in 70 years, says IFS
Labour's general election manifesto would increase the tax burden to its highest level in nearly 70 years, according to an independent thinktank.
Figures released by the party show it expects to raise an additional £48.6bn for the Treasury through a range of measures of tax rises.
Around half of that total would come from increasing taxes on those earning more than £80,000 and reversing the Government's cuts to corporation tax.
An "excess pay levy" on firms which hand out salaries of more than £330,000 would bring in another £1.3bn, a crackdown on tax avoidance would raise £6.5bn and VAT on private school fees - which is earmarked to pay for free school meals for primary pupils - would raise £1.6bn.
The 128-page manifesto says Labour would introduce "a fair taxation scheme for the common good".
"Under Labour’s plans, 95% of taxpayers will be guaranteed no increase in their income tax contributions, and everyone will be protected from any increase in personal National Insurance contributions and VAT," it says. "Only the top 5% of earners will be asked to contribute more in tax to help fund our public services."
But Paul Johnson, director of the Institute for Fiscal Studies, said: "They are suggesting a £50bn increase in tax which if it were to be implemented, by the way, would take the tax burden in this country to the highest level it’s been in about 70 years."
He also questioned whether Labour's plans would raise what they set out to do.
"I think there’s an awful lot of uncertainty about whether you could actually raise that amount of tax," he said. "They’re talking about very, very large increases in taxes on companies which would likely reduce the amount of investment that they do. So I think the actual amount you could get from these policies – it certainly runs into the tens of billions – but probably doesn’t reach the £50bn that Labour are claiming."
Dr Adam Marshall, director general of the British Chambers of Commerce, said Labour's plans would give companies "real cause for concern".
He said: "While Labour are making some specific and targeted propositions that could boost the growth prospects of small- and medium-sized firms, these will be largely eclipsed by their proposals for higher personal and business taxes in the eyes of business leaders around the UK."
For the Conservatives, Chief Secretary to the Treasury David Gauke said: "Today confirms what we already knew: Jeremy Corbyn’s nonsensical ideas simply don’t add up. And every single working family in this country would pay for Corbyn’s chaos with higher taxes."