Labour promises 'Robin Hood tax' to raise £26bn for public services
Labour would introduce a "Robin Hood tax" on financial transactions to raise £26 billion to spend on public services, Shadow Chancellor John McDonnell has announced.
Mr McDonnell said the moves would make the City "pay its fair share after it received huge public bailouts in the crash" and help reverse seven years of Tory spending cuts.
Labour also plans a massive crackdown on tax avoidance, which would include forcing those earning more than £1 million to make their tax returns public.
The Robin Hood tax would see a 0.5% charge placed on speculative share trading by major financial institutions.
Mr McDonnell said it would eliminate the most destabilising forms of speculative high-frequency trading, while raising billions for the public purse over the course of the next parliament.
But the move is likely to be opposed by major financial institutions, who say it will damage the competitiveness of the City of London.
The Shadow Chancellor said: "The next Labour Government will introduce a 'Robin Hood Tax' to make the financial sector pay its fair share after it received huge public bailouts in the crash.
“Ordinary people are still being made to pay by the Tories for a crisis they didn't cause through the worst spending cuts for generations.
"All we're asking for is fairness in our tax system. By making those who trade in financial derivatives pay a small fraction of their profits, we can help properly fund our public services.
“Instead of Conservative tax breaks for the super-rich, we’ll put more money in people’s pockets, protect 95% of people from any rises in income tax, National Insurance and VAT, and build a Britain for the many, not the few."
Measures proposed in Labour’s tax avoidance crackdown (read the FULL list here) include more HMRC staff to investigate high net worth individuals, alongside punishing sanctions for tax havens.
The party will consult on imposing extra taxes on individuals or companies registered offshore and bar firms shrouded in secrecy from winning public service contracts.
Meanwhile, it will put an end to the stealth benefits of trusts - key vehicles for tax avoidance which allow individuals to buy and sell assets in complete anonymity.
The party told PoliticsHome it will reveal the amount it expects to claw back from tax havens in its final manifesto - due to be published next week.
Tax avoidance came under the spotlight in June last year after the so-called ‘Panama Papers’ were leaked, revealing details of numerous individuals holding wealth offshore.
As a result of the leak, the then-prime minister David Cameron revealed he and his wife Samantha profited from an offshore trust set up by his father to the tune of £19,000.
Financial Secretary to the Treasury Jane Ellison said Labour's plans were "a total shambles from Jeremy Corbyn".
"The transaction tax has been described as ‘madness’ by his own Mayor of London because it risks economic growth and jobs, and just weeks ago in Parliament Labour blocked measures to stop almost £9bn worth of tax avoidance," she said.
"“Since 2010 we have recouped an extra £140 billion in tax that would have otherwise been avoided or evaded. Under the strong and stable leadership of Theresa May, we will relentlessly go after those who do not pay their fair share.”