John McDonnell is heading for a clash with opponents on tax as he unveils plans which are likely to mean increases for anyone earning more than £80,000 a year.
In a speech in east London, the shadow chancellor will promise what he calls a personal tax guarantee, which he says would protect low and middle income earners.
Mr McDonnell will promise that under a Labour government there would be no increase in the standard rate of VAT; income tax for those earning below £80,000, or personal national insurance contributions.
He says only the highest earners, the top 5%, would be asked to pay more tax. But his political opponents are accusing him of a tax raid on Britain’s professional classes.
They claim anyone earning more than £80,000 would face a tax hike under Labour and that up to 1.2 million people could be hit.
Mr McDonnell’s proposals also suggest he would bring back the 50p tax rate introduced by former Labour chancellor Alistair Darling and later scrapped by his Tory successor George Osborne.
In his speech, Mr McDonnell will say: “The choice at this election is very clear on tax, as there is currently only one party which is committing not to raise taxes on middle and low earners – and that is the Labour Party.
“If Labour is elected next month we will guarantee that for the next five years there will be no tax rises for income taxpayers earning less than £80,000 a year, no hikes in VAT and no changes in your national insurance contributions either.
“The Labour Party is now the party of low taxes for middle and low earners, while the Tories are the party of tax handouts for the super-rich and big corporations.
“That is why every time Theresa May and the Tories are asked whether they are planning tax increases if they are re-elected on 8 June, they run and hide.
“They are so determined not to be questioned on their plans, the Prime Minister refuses to take part in any TV debates and will only visit workplaces if there are no workers there, just her own party’s activists.
“The Tories are hoping that the British people can be kept in the dark about what the tax increases they are planning will mean for those on middle and low incomes, who have had to bear the brunt of seven years of austerity.”
His announcement comes only days after the Chancellor Philip Hammond, who was forced to abandon his Budget increases in national insurance contributions, accused Labour of a tax and debt bombshell. Critics also say there are holes in Labour’s plans.
Attacking the shadow chancellor’s pledge, the Treasury Chief Secretary David Gauke said: “Jeremy Corbyn will have to raise taxes because his nonsensical economic ideas don’t add up and he’ll make a mess of the Brexit negotiations.
“That’s why he talked about raising the basic rate of income tax to 25p in 2015 – and the Lib Dems and SNP who would prop him up want to increase taxes too. Every family and business would pay the price for the tax and debt bombshell they would drop on Britain.”
The Liberal Democrats’ shadow chancellor, Susan Kramer, said: “Labour’s so-called tax pledges aren’t worth the paper they’re written on, given their inability to form a proper opposition, let alone a government.”
After their own pledge to put a penny on income tax to fund the NHS and social care, the Lib Dems are now promising that pensioners will receive at least an extra £772 per year by 2021 under plans in their manifesto plans to protect the triple lock, which means pensions rise in line with earnings, prices or 2.5%, whichever is higher.
The party claims this guarantee means the state pension is expected to be worth at least £137.15-a-week by 2021, up from £122.30 in 2017.
Commenting on the plan, Sir Vince Cable said: “Liberal Democrats believe that an important test of a civilised society is the way in which it cares for the elderly.
“The guiding principle of the pensions system must be to ensure that none are left unable to meet their basic needs for survival and participation in society, and that everyone is treated with the respect and dignity they deserve.”
Theresa May’s latest policy pledge is a major shake-up on mental health, now a high-profile issue after the footballer Aaron Lennon was taken to hospital suffering from a stress related illness and Prince Harry revealed he sought help for a mental health struggle brought on by the death of his mother Princess Diana.
The Prime Minister is promising to replace the 1983 Mental Health Act to tackle the overuse of detention; reform the Equalities Act to outlaw discrimination at work; and commit 10,000 more NHS staff to mental health buy 2020.
Announcing the proposed legislation, the Prime Minister said: “On my first day in Downing Street last July, I described shortfalls in mental health services as one of the burning injustices in our country.
“It is abundantly clear to me that the discriminatory use of a law passed more than three decades ago is a key part of the reason for this.
“So today I am pledging to rip up the 1983 Act and introduce in its place a new law which finally confronts the discrimination and unnecessary detention that takes place too often.
“We are going to roll out mental health support to every school in the country, ensure that mental health is taken far more seriously in the workplace, and raise standards of care with 10,000 more mental health professionals working in the NHS by 2020.”