Jeremy Corbyn says he will hike business taxes to fund a new education service

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Corbyn also warned MPs and party members to be ready for a general election next year (Source: Getty)

Labour leader Jeremy Corbyn has offered “a new settlement” to British businesses, warning he will increase taxes to fund a new National Education Service.

Addressing the Labour party conference, Corbyn said Labour would raise taxes, adding to a previous plan to raise corporation tax to fund a new Education Maintenance Allowance.

However, he added that in return the party would offer “a level playing field” for firms on tax, and reiterated a plan to fund infrastructure investment with a new £500bn National Investment Bank.

“I also pledge to good businesses that we will clamp down on those that dodge their taxes - you should not be undercut by those that don’t play by the rules.

"There is nothing more unpatriotic than not paying your taxes it is an act of vandalism, damaging our NHS, damaging older people’s social care, damaging younger people’s education," Corbyn said, vowing to end "shabby tax avoidance".

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Responding to the speech, British Chambers of Commerce acting director general Adam Marshall said: "While businesses agree that investment in infrastructure and skills is crucial to the UK’s future success, many will be concerned that Jeremy Corbyn is already reaching for the tax lever by asking businesses to pay for his education plans.

"A competitive business environment requires effective and efficient public spending, reasonable levels of taxation and regulation, as well as great infrastructure and a trained workforce."

Marshall added: "As the Labour Party develops its proposals further, it has to get the balance between these factors right – or risk denting business confidence and investment."

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CBI deputy director general Josh Hardie said: "The CBI shares much of Labour's vision for a fairer society underpinned by good business. But without an open dialogue there is a risk that some of their policies could take us backwards.

"The focus on research & development, infrastructure and education is encouraging, but artificially hiking wages and changing corporation tax could be investment dampeners, not drivers."

Institute of Directors director general Simon Walker questioned how Corbyn would afford his plans for dramatic infrastructure investment and accused the Labour leader of portraying business as "a comic-book villain".

"Over 80% of people work in the private sector and there are more than five million businesses in the UK, Walker said.

"They are the source of the nation’s prosperity, the generators of employment and the funders of our public services. They are not a problem to be solved."

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Sketching the outline of a "municipal socialism for the 21st century", Corbyn said: "If the Tories are the party of cuts and short-termism. Labour is the Party of investing for the future", outlining a pair of new policies that would feature in his party's election platform.

Firstly, Corbyn said the party would allow councils to borrow against their housing stock to support the building of more council housing, and secondly he promised a new "arts pupil premium" for all primary schools.

And the Islington North MP also said the party should be prepared for a general election next year.

Conservative party chairman Patrick McLoughlin said the speech showed a party that would: "spend, borrow and tax even more than they did last time, support unlimited immigration, and cannot be trusted to keep our country safe."

"They are not a credible alternative government and they have nothing to offer as we work to build a country that works for everyone."

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