Shadow chancellor calls on government to prioritise less well off
by Steve Sweeney
SHADOW chancellor John McDonnell called on the government to “urgently reconsider” plans to further reduce corporation tax as a report released yesterday revealed that most Tory tax cuts have gone to the rich.
He accused the Tories of having “skewed priorities” — pursuing policies that benefit big businesses while slashing employment support allowance for people with disabilities and long-term illnesses, along with universal credit benefits and local council funding.
Former chancellor George Osborne had tried to justify these cuts by claiming that they would reduce the deficit.
This is while corporation tax has been cut from 28 per cent in 2010 to 20 per cent today, and is due to be reduced to 17 per cent by 2020-21.
The Resolution Foundation report called on Chancellor Philip Hammond to reverse the planned tax cuts for wealthiest families and firms ahead of his Autumn Statement on November 23.
Resolution Foundation chief economist Matt Whittaker argued that, instead of implementing “unaffordable, unfair and unwise” reductions in spending, Mr Hammond should increase work allowances under universal credit.
This is because benefits for people in work or seeking jobs “offer a far more targeted boost to living standards than costly further increases in the personal tax allowance.”
He went on to say that around four-fifths of the £21 billion spent would go to “the richest half of households.”
The report also condemned costly tax giveaways earlier this year that made a mockery of the government’s own claims to close the deficit.
It reads: “The £32bn worth of tax cuts announced since 2010 have been the difference between the government hitting and missing its deficit reduction targets in the last parliament, or indeed in this one.”
People’s Assembly national secretary Sam Fairbairn said: “Austerity has clearly not gone away, despite the rhetoric.
“The Tories are attacking benefits and public services to fund tax cuts for the rich.”
Mr McDonnell said: “This report underlines our argument that the government’s economic priorities have been wrong, and they must now urgently reconsider their determination to cut corporation tax to benefit big business.
“Austerity is a political choice, not an economic necessity. Labour would instead invest for the future to deliver growth that can be shared across the country, so that nobody and no community is left behind.”